Goldman Sachs has bought warrants worth Dhs147 million ($40 million) in Dubai’s Drake & Scull International, shortly after helping the contracting company to arrange a loan facility.
The warrants, which mature in five years, can be exercised by the global investment firm any time after two years. The investment will represent around 8.5 per cent of Drake & Scull’s current market capitalisation.
Goldman’s exposure will be settled in cash once the warrants are exercised, subject to pre-agreed maximum cash settlement amount.
The Dubai-listed contracting company reported a 93 per cent drop in third quarter profit on Sunday, despite winning three new contracts in the GCC last week worth a combined total of around Dhs318.5 million ($86.7 million).
Drake & Scull secured mechanical, electrical and plumbing contracts for a commercial development in Saudi Arabia worth around 83 million riyals.
The firm also won contracts for a government administration facility and a hospitality venue in Abu Dhabi worth Dhs115 million and Dhs118.5 million.
Goldman acted as a coordinator last week as Drake & Scull signed a $120 million equivalent loan facility to support its growth into other markets.