Dubai retailer Marka said its planned reduction of share capital will proceed and invited creditors to deliver documents detailing debts owed to them within the next 30 days.
The firm, which counts fashion, sports and food retailers including Reem Al Bawadi and Morelli’s Gelato among its brands, has failed to make a profit since listing on the Dubai stock exchange in 2014.
In 2017, it began a restructuring programme including selling stores and cutting operational costs, and more recently has said it is considering all available options for capital restructuring, and seeking a strategic partner to invest capital in the company.
During a board meeting last November, Marka proposed a share capital reduction of Dh450 million. The proposal to decrease its capital from Dh500m to Dh49.87m was intended to help extinguish Dh450m of accumulated losses, by increasing shareholder value and producing a more efficient capital structure.
The board of directors later approved the proposal, during a general assembly meeting on March 4.
In a bourse filing on Sunday this week, Marka said the capital reduction will proceed.
“Marka invites its creditors to deliver at its headquarters [at Dubai Design District], all the documents supporting their debts within 30 days from the date of this announcement,” said the statement to the Dubai Financial Market, where Marka’s shares are traded.
Marka’s auditors PwC said last August that the company’s financial indicators cast doubt on the its ability to continue operations.
The introduction of VAT since January 2018 and the rapid growth of e-commerce in the country are major headwinds for the retail sector in the GCC.
