Shareholders in Dubai-based construction company Drake & Scull International voted overwhelmingly in favour of the business continuing to trade at a general meeting on Thursday.

Some 99.98 percent of shareholders voted in favour of a resolution allowing the business to continue to trade, which was triggered by a legal requirement for companies who accumulate losses that reach a value of more than half of their share capital.

The cash-strapped company's management will now prepare a new restructuring plan, which will then need to be approved by United Arab Emirates market regulator, the Securities and Commodities Authority.

If it approves the plan, another general meeting will be held for shareholders to vote on it.

Company officials declined to be interviewed following the meeting, but a source close to the firm said that it would embark on a "full restructuring programme" that will be drawn up by third party financial advisors.

Shareholders were also updated on an ongoing company investigation into the actions of former executives at the firm.

The source said that a briefing was also given into the company's ongoing investigation into the actions of former management, which he said was "progressing", and that files have been passed on to the UAE's attorney general.

The restructuring plan will be the second the company has undergone in a year. Last year, the company cancelled three quarters of its share capital to wipe out 1.7 billion UAE dirhams ($462.9 million) worth of losses, ahead of a 500 million UAE dirham injection of funds by Tabarak Investment, which became the majority shareholder.

However, losses have continued to mount, and in the second quarter of 2018 the company declared a 190 million UAE dirham loss as revenue dropped by 47 percent year-on-year to 350 million dirhams.

Notes to the accounts state that the company's current liabilities outweigh its current assets by 988 million UAE dirhams.

(Reporting by Michael Fahy; Editing by Shane McGinley)
(michael.fahy@refinitiv.com)

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