On Thursday, the Dubai based construction Company that once contributed to building the world’s largest building Burj Khalifa and other engineering marvels in the United Arab Emirates announced it would enter liquidation, which is the final step in a long collapse due to the country’s economic crisis accelerated by the Coronavirus pandemic.
A big construction Company collapsed
Arabtec Holding PJSC made the announcement after emails circulated on Wednesday between the developers which suggested that the company end has come. Apart from trying to reach its way out of the confusion left by Dubai’s 2009 economic crisis, last year, the firm ended with hundreds of millions of dollars in debt and losses.
What’s chairman said about the collapse of the company?
Arabtec chairman Waleed al-Muhairi said in a statement that after several years of barriers, the slowdown of the economy due to the Coronavirus pandemic has extremely impacted the company’s projects.
He further added that despite efforts to seek legal and commercial entitlements and restructuring of finances and operations of the company, the situation in which Arabtec finds itself is untenable.
The Dubai Financial Market stopped trading on Arabtec shares late Wednesday. One of the biggest Arabtec investors is the Abu Dhabi-based sovereign wealth fund Mubadala.
Some infrastructure made by Arabtec
Arabtec was founded in the year 1975. It has built both the skyscrapers and the infrastructure needed to pump oil and natural gas in this OPEC-member nation. It has also contributed to building Burj Khalifa, the centerpiece of modern downtown Dubai that at 2,717 feet (828 meters) is the world’s tallest building. It has also built Louvre Abu Dhabi, Abu Dhabi’s Emirates Palace hotel, and a major centerpiece of Dubai’s upcoming Expo 2020 world’s fair.
Arabtec is struggling since 2009 Dubai’s financial crisis
Arabtec has struggled to come out of Dubai’s 2009 financial crisis, like other construction companies. In the crisis, it saw its property market collapse and the city ultimately receives $20 billion in bailouts from Abu Dhabi, the Emirates oil-rich capital.
Arabtec’s corporate panicked in 2014 when it saw a drag down in Dubai Financial Market by quarter and its own shares fell down by 60 percent raising questions that why financial regulators step in the matter and over transparency in UAE markets.
The Collapse of Arabtec company will have a further knock-on effect on the important construction industry in Dubai as it is remained to attach in some projects in the city-state. Also, Dubai has already seen a value drop of properties by third since 2014 and its tourism and travel remained weak due to the ongoing pandemic.