Goldman Sachs Group Inc. bought warrants representing about 8.5 percent of the market value of Drake & Scull International PJSC, a Dubai-based supplier of engineering services to the construction industry.
The warrants have a notional value equal to 147 million dirhams ($40 million) with a five-year maturity and can be exercised after two years, Drake & Scull said today in a statement to the Dubai stock market.
The company, whose shareholders include HSBC Private Bank, reported a 93 percent drop in third-quarter profit, missing analysts’ estimates. Drake & Scull said on Nov. 14 that it obtained a $120 million loan, coordinated by Goldman Sachs, to help it pursue “growth plans in North Africa, Asia and other growth markets and provide the liquidity to capitalize on various private public partnership projects.”
Third-quarter profit retreated to 3.92 million dirhams, from 57.5 million dirhams a year earlier as contracting revenue dropped 26 percent, the company said in a statement yesterday. The median estimate of four analysts was for a profit of 37.8 million dirhams, according to data compiled by Bloomberg. The decline reflected a slowdown in the construction industry, according to the company.
Productivity rates dropped across projects in the Gulf Cooperation Council countries and Africa, while the procurement cycle dipped because of the summer holiday season, Chief Financial Officer Osama Hamdan said in the statement. Drake & Scull has an order backlog of 7.5 billion dirhams, it said.
Drake & Scull fell 4.3 percent to 71.8 fils at 1:59 p.m. in Dubai today. The stock declined 4.3 percent this year compared with a 17 percent advance for the benchmark DFM General Index.