The impact of the liquidation of UAE construction giant Arabtec will send “reverberations” throughout the industry, with the repercussions felt on a much wider scale than simply those who are directly involved with the company and its current pipeline of projects.
That’s the view of Mark Raymont, partner, construction advisory disputes at Pinsent Masons, who revealed the twin shocks of the current coronavirus pandemic and depressed oil prices, has increased the stress on what was already a struggling industry.
His comments came as Arabtec belatedly confirmed that shareholders had voted to discontinue with the company and dissolve it due to its untenable financial situation. The resolution of the shareholders grants the Arabtec board a maximum period of two months to allow for discussions with the main stakeholders before a liquidation application may be submitted to the competent courts.
In the meantime, Arabtec’s primary objective is to provide stability for staff, subsidiaries, sub-contractors, suppliers, and other stakeholders, the company said in a statement.
Waleed Al Mokarrab Al Muhairi, chairman of Arabtec, said: “In recent years, limited liquidity in the construction sector has impacted the progress of Arabtec’s projects and this has been exacerbated by the effects of Covid-19. Despite efforts to pursue legal and commercial entitlements and a restructuring of the Company’s finances and operations, the situation in which Arabtec finds itself today is untenable.
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