Saturday, December 12, 2009
LONDON: British road and infrastructure maintenance company Mouchel Group PLC said on Friday it is closing its operations in Dubai as it continues attempts to recover 10 million pounds ($16.3 million) owed by clients.
Mouchel said it is refocusing its Middle Eastern business to oil-rich Abu Dhabi, where it believes the “long term outlook is favourable and there are immediate opportunities.”
Shares in the British company jumped 12.7 per cent to 180 pence after a trading update, which also said it was benefiting in its home British market from a drive by clients to make cost savings in the current economic climate.
Mouchel revealed in October that it was attempting to recover 30 million pounds of unpaid client bills in Dubai. It said on Friday that, after initial success, payments had ceased and “there is now greater uncertainty around recovery” of the remaining outstanding payments.
“The general position in Dubai has clearly deteriorated,” the company said in a statement to the London Stock Exchange. “As a result, we will now be closing our remaining operations in Dubai, save for the efforts we will continue to make to seek the recovery of money that is owed to us, although we recognise that this could take some time.”
Dubai, one of seven sheikdoms making up the United Arab Emirates, has been in financial turmoil since government investment company Dubai World shocked markets by calling for a delay in paying back billions of dollars of debt.
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