Dubai’s Drake & Scull awarded MEP contract for Abu Dhabi’s Reem Mall

The announcement comes as DSI shares remain suspended on the Dubai Financial Market



Troubled Dubai contractor Drake & Scull (DSI) said on Wednesday it had been appointed as the MEP contractor for Abu Dhabi’s $1.2bn Reem Mall project.

The announcement comes as DSI shares remain suspended on the Dubai Financial Market (DFM) for breaching stock market regulation.

Read: Dubai stock market suspends trading of troubled Drake & Scull’s shares

DSI said it had been awarded the Dhs600m ($163.3m) mechanical, electrical and plumbing contract under a joint venture with lead contractor Itinera-Ghantoot.

Reem Mall was originally due to open last year but has been hit by a series of delays. Work began in late 2017 and a new opening date of 2020 has been announced.

Read: Work on Abu Dhabi’s $1.2bn Reem Mall progresses with 4,000 workers onsite

Once finished, it will span 2.8 million square feet and include 450 stores, 85 food and beverage outlets and a snow park operated by Majid Al Futtaim.

Read: Abu Dhabi’s Reem Mall plans world’s largest indoor snow-play park

DSI said last month it was working with regulators to lift a stock market suspension announced on November 15.

Read: Dubai’s Drake & Scull says working with regulators to lift stock market suspension

In an update accompanying Wednesday’s announcement, the firm said it had achieved progress on its restructuring efforts and appointed advisors to help “stabilise the business and support future growth”.

“The company also aims to accelerate bidding and secure carefully selected projects, predominantly in the UAE, with several fully financed projects in various stages of active bidding,” it said.

Reuters reported that the firm saw a net loss of Dhs498m ($135.5m) in the third quarter as it appointed new advisors for its restructuring efforts.

Read: Dubai’s Drake & Scull appoints advisors after posting Dhs500m Q3 loss

The announcement came after shareholders rejected a resolution to dissolve the company in October following a second-quarter net loss of Dhs181.1m ($49.3m).

Read: Dubai’s Drake and Scull shareholders decide not to dissolve the company

Earlier this year, it was reported by Bloomberg that the former CEO of DSI, Khaldoun Al Tabari, and his daughter owed the company up to Dhs1bn ($272.3m).

DSI also issued a bourse statement confirming the “existence of material financial violations from the previous management”.

It said the violations are under investigation by UAE authorities.

However, Tabari strongly refuted the claims, and warned of legal action against those spreading “unfounded allegations”.

Also read: Ex-CEO of UAE’s Drake and Scull denies wrongdoing, warns of legal action

Drake & Scull has been hit by a slowdown in the regional construction sector over the past few years.