Shares in embattled Dubai contractor Drake & Scull International (DSI) posted their largest one-day gain in five months after the company announced that Khaldoun Tabari, the long-standing leader of DSI is to stand down as the chief executive.
DSI shares jumped on the Dubai Financial Market to close up 7 per cent at 47.4 fils. The 66-year-old Mr Tabari turned the erstwhile overseas arm of a UK company into one of Dubai’s largest contracting firms after he bought a majority stake in 1988.
He also presided over the company’s IPO in 2008. Mr Tabari will be replaced by the company’s chief operating officer Wael Allan.
In a statement to the Dubai bourse, DSI said that Mr Allan was to assume the new role from yesterday, marking “the final phase of a six-month management transition process initiated with his appointment as [COO] in the first half of the year”.
DSI said that Mr Tabari, who still owns 8.24 per cent of company shares, would continue to serve as a non-executive board member, member of the executive committee and vice chairman. He originally tendered his resignation in August.
In August, DSI announced that it was in the process of changing its leadership structure after the company reported a Dh207.6 million second-quarter loss compared with a Dh10.3m profit for the same period a year earlier.
DSI’s second-quarter revenue was Dh805.5m, versus Dh1.29 billion a year earlier.
The construction firm has been hard hit by the economic slowdown across the Arabian Gulf in the wake of lower oil prices, particularly in its core market of Saudi Arabia.
At the time company officials said that DSI had made a decision to withdraw gradually from its civil engineering business in Saudi Arabia, and had discussed with advisers the possibility of a further business review.
“I believe this is the right time to hand over to Wael Allan and the senior team that will now chart the future course of the company,” Mr Tabari said in the statement to the DFM yesterday.
Before his appointment at DSI, Mr Allan worked as the chief executive for Arcadis Middle East and held a number of senior management roles at companies including Hyder Consulting, Skanska USA Buildings, Washington Group International and Raytheon Engineers and Constructors.
DSI first opened in Abu Dhabi in 1966. It was generating revenues of less than Dh100m a year when Mr Tabari bought the company.
Within a few years the UK operation changed its name to Emcor Engineering and Mr Tabari acquired the remaining stake in DSI.
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