It keeps getting worse? Arabtec lays off hundreds of employees
Shares of the UAE’s largest construction firm, Arabtec, on Monday tumbled to its lowest since March after the company fired hundreds of employees, Bloomberg reported, citing people familiar with the matter.
The Dubai contractor has laid off a significant number of employees in the wake of chief executive Hasan Ismaik’s departure last week, sources said, adding: “Shohidul Ahad-Choudhury, Arabtec’s head of mergers and acquisitions and a former Deutsche Bank executive, was among those dismissed.”
It is reported that large numbers of staff, including at least two senior executives, have departed the company since Ismaik resigned. Arabtec didn’t confirm the staff lay-off.
The contractor has plunged 48 per cent so far this month and 53 per cent from a record Dh7.40 in May. Abu Dhabi state-run Aabar Investments cut its stake to 18.85 per cent as of June 11 from 21.57 per cent, stoking speculation the builder was losing government backing.
Investors are selling Arabtec because there’s uncertainty surrounding its governance and ability to “execute their pipeline of projects effectively with so much internal strife”, according to Ramez Merhi, director of asset management at Dubai-based Al Masah Capital.
“This looks as if it could have been a fight for control of the company and Aabar won.”
Ismaik is still the single-largest shareholder in Arabtec with an nearly 29 per cent stake. The former CEO said on June 18 that he would consider selling his shares in the company if he gets an offer from the government. Arabtec board member Mohamed Al Fahim was appointed acting CEO following Ismaik’s departure.
“The company must be forced to come up with an announcement to ease tension among the investors, mainly the small investors,” Wadah Al Taha, chief investment officer of Dubai-based Al Zarooni Group, said.
- Giving up on the EU? Greece, Cyprus look to GCC investors
- Turkish whistleblower: government can hand over any bank to state fund
- Why Israelis are rushing to empty out their Swiss bank accounts
- Wealth in the land of Arab Spring: Egypt's top ten richest men in 2014
- Will the US dollar peg protect GCC currencies?