Dubai: Arkan, the Abu Dhabi-based building materials company, will begin paying off its loans and other commitments from mid-December 2022.
This follows a ban on the repayment that it entered into its with principal lenders. But this brings in the clause – Arkan won’t make any profit installments to investors until late 2022.
“In light of these challenging circumstances, the Board has decided not to pay dividends for the foreseeable future,” the company said in a statement. “Furthermore, the priority of the company going forward will be to lower its significant leverage levels and it may need to explore further capital structure options in the future.”
Arkan tapped restructuring specialists Rothschild & Co to come up with a plan to solve its debt burden and pay duty.
Steep drop
The company noted a total loss of Dh66.54 million for 2020, which contains an impairment write-off costing Dh28.82 million, taken against a non-core associate investment from the company’s book entry for the year. In 2019, it had booked a net benefit of Dh46.01 million, which profited by a coincidental increase of Dh28.61 million, from the offer of scrap resources at Emirates Cement Factory and continues from a protection guarantee in the Cement Division.
‘De-leverage’
“Infrastructure programs slowed, reducing the demand for building materials,” said Jamal Salem Al Dhaheri, Chairman of Arkan. But “there is light at the end of the tunnel. We have completed a further operational restructuring program to right-size the business for the current and expected market environment, which will help stabilize the business.
“These are challenging times for Arkan and going forward, the Board and Management of Arkan will primarily focus efforts on deleveraging the business.”