UAE construction behemoth Arabtec that built the world’s tallest building the Burj Khalifa has formally declared that it was moving into liquidation post stakeholders discovered the untenable financial situation.
Due to limited liquidity in recent years which have affected the construction sector, there has been observed a decline in the Arabtec’s progress and with the outbreak of coronavirus has aggravated it, even more. There have been efforts to seek commercial and legal entitlements, including a restructuring of the company’s operations and finances. Still, the situation is indefensible, said Chairman, Waleed Al Mokarrab Al Muhairi.
On Wednesday, Arabtec Holding PJSC announced post circulating emails amongst developers submitting the firm’s end had arrived. Notwithstanding striving to survive and manage after Dubai’s 2009 financial crisis, the company was in hundreds of millions of dollars in losses and debt by the end of last year.
According to the news, there have been weeks of speculation by the firm before taking a call, and in Wednesday’s general assembly meeting, stakeholders opted to discontinue and dissolve. It is decided that the management will come up with a better plan to maximize the value for the stakeholders through an efficient and controlled programme. The Chairman also mentioned that their priority in the current scenario is to ensure that whoever is directly affected by the decision should be treated fairly during these difficult times.
On October 1, the Dubai Financial Market suspended trading of the stock of the firm that built the world’s tallest skyscraper.
Many other construction firms have grappled with coming out of the umbra of Dubai’s 2009 crisis, which noticed its property market fall and the town eventually received $20 billion in bailouts from the Emirates’ oil-rich capital, Abu Dhabi.
But now in 2020, with the collapse of Arabtec Holding PJSC will have repercussions on the construction industry in Dubai, indicating to many other major projects. There has been a drop in property value, plus even the travel and tourism sector is suffering due to pandemic.