Last day to subscribe to Arabtec’s rights on May 28

28/05/2017 02:10 AST

The last day for Arabtec rights holders to disclose their intent to subscribe to rights will be on May 28, before the new shares get listed on the Dubai Financial Market on June 8. “Subscription forms will be available during the Subscription Period from participating branches of First Abu Dhabi Bank,” Arabtec said in a recent statement. The subscription period started from May 15.

Traders who bought into the rights issue were unable to trade the rights from May 16, the second day of trading, through May 21 due to a sharp falls in the price following speculative buying on May 15, when the rights price jumped as high as 2,000 per cent. Traders may look to subscribe to rights at Dh1 to recover part or full losses booked, by hoping for a recovery in Arabtec shares. But analysts say that few traders will choose such an option, when the stock price is lower than the offer price.

The rights price was set at Dh1 with a premium of 6 fils on final day of trading. Arabtec’s share price was Dh0.725 on May 25.

“This was unjustified activity and not value trading. There is no reason for the rights issue to be trading at a positive value and for sure no reason to reach 20 fils,” Marwan Shurrab, head of high net worth and retail equity brokerage, Al Ramz told Gulf News on May 15, the first day of rights trading, when it went by as much as 2,000 per cent at one point.

Recapitalisation programme

The last date for allocation and refund will be on June 5, and the expected date of listing of new shares will be on June 8, under the new ratio.

Arabtec’s rights issue and capital reduction are part of a recapitalisation programme announced in February this year to turn around financial performance as the company reported Dh3.4 billion in losses for 2016. The company registered a profit in the first quarter to March.

The company will cancel over 4.6 billion of its shares effective June 21 as part of the company’s capital reduction programme. The share cancellation will reduce Arabtec’s share capital to Dh1.5 billion, distributed among 1.5 billion shares of a nominal value of Dh1 each. Aabar Investments, who owns 36.11 per cent stake in the company and is the single largest shareholder will be underwriting the offer.

Gulfnews