DUBAI, United Arab Emirates (AP) — The Dubai-based construction company that helped build the world's tallest building and other engineering marvels in the United Arab Emirates announced Thursday it would enter liquidation, the final step in a long collapse from the country's economic crisis a decade ago hastened by the coronavirus pandemic.
Arabtec Holding PJSC made the announcement after emails circulated Wednesday among developers suggesting the firm's end had come. Despite trying to claw its way out of the chaos left by Dubai's 2009 financial crisis, the firm ended last year with hundreds of millions of dollars in debt and losses.
Arabtec chairman, Waleed al-Muhairi, said in a statement published by Abu Dhabi's state-linked newspaper The National that after years of setbacks, Arabtec’s projects were severely hit by the economic fallout of the pandemic.
“Despite efforts to pursue legal and commercial entitlements and a restructuring of the company’s finances and operations, the situation in which Arabtec finds itself today is untenable," he said.
The Dubai Financial Market halted trading on Arabtec shares late Wednesday. Among Arabtec's biggest investors is the Abu Dhabi-based sovereign wealth fund Mubadala.
Founded in 1975, Arabtec has built both skyscrapers and the infrastructure needed to pump oil and natural gas in this OPEC-member nation. It helped build the Burj Khalifa, the centerpiece of modern downtown Dubai that at 2,717 feet (828 meters) is the world's tallest building. It also built the Louvre Abu Dhabi, Abu Dhabi's Emirates Palace hotel and a major centerpiece of Dubai's upcoming Expo 2020 world's fair.
But Arabtec, like other construction firms, has struggled to come out of the shadow of Dubai's 2009 financial crisis, which saw its property market collapse and the city ultimately receive $20 billion in bailouts from Abu Dhabi, the Emirates’ oil-rich capital. Arabtec's corporate turmoil in 2014 also saw it drag down the Dubai Financial Market by a quarter of its value as its own shares fell over 60%, raising questions about why financial regulators didn't step in and over transparency in UAE markets.
The collapse of Arabtec will likely have a further knock-on effect on the vital construction industry in Dubai as it remained attached to other major projects in the city-state. Already, Dubai has seen property values drop by a third since 2014 and its tourism and travel industry remains weak because of the pandemic.