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UAE Regulator to Assign Valuer to Examine Drake & Scull’s Arabian Hills Contract

Prime Highlights

  • UAE financial regulator to hire independent valuer to examine Drake & Scull’s AED 1 billion Arabian Hills contracts.
  • The development comes amid worries about governance and valuation disclosure as the company comes out of significant restructuring.

Key Facts

  • Drake & Scull won two infrastructure contracts worth AED 452.85 million and AED 557.8 million.
  • The scope encompasses street lighting, power, sewage treatment, and utilities on a 224 million sq ft development.
  • The company targets 8–10% profit margins and completion by end of 2027 through the use of internal funds and bank facilities.

Key Background

Drake & Scull International (DSI), one of the largest UAE construction and engineering firms, is facing regulatory scrutiny after winning two key contracts in the gigantic Arabian Hills project. Worth more than AED 1 billion, the contracts entail basic infrastructure work such as roads, utilities, street lighting, and a sewage treatment plant. The scope involves a whopping 224 million square foot master-planned community.

Earlier, the company explained to markets that both these contracts, valued at AED 452.85 million and AED 557.8 million, respectively, would be funded by a combination of cash flow from within and available banking facilities. It aims to deliver the projects by the end of 2027 with a 8–10% profit margin. The company also mentioned that revenue would be recognized in accordance with project milestones of completion.

But because of issues of transparency and adequate valuation, the UAE regulator has finally intervened. In response to queries from the public and the media, the regulator indicated its plan to hire an independent valuer to assess the financial soundness of the Arabian Hills transaction. The move is designed to protect investors and confirm that the contracts are in line with prudent market principles.

This step is made by DSI at a very crucial juncture. Having nearly collapsed in 2018 after accumulating over AED 5 billion in losses, the firm completed a restructuring approved by the courts last year involving cutting the majority of its debts, issuing convertible bonds, and re-listing on the Dubai Financial Market in 2024. The company posted a net profit of AED 3.76 billion—mostly because of liability write-backs—in the same year, which was a milestone in its recovery process.

With renewed investor interest and over AED 1 billion in new project wins, DSI is also expanding into Saudi Arabia and Egypt. Yet, the appointment of a valuer indicates that despite its comeback, authorities are keen to ensure full regulatory compliance and governance, especially with high-value contracts in play. This review is expected to reinforce accountability while strengthening stakeholder confidence in DSI’s operations and future projects.