Pacific Controls in debt talks

TECH FIRM HAS NOT MADE PAYMENTS ON SHORT-TERM BILATERAL LOANS

Pacific Controls, a Dubai-based technology company, is in talks with banks about restructuring debts of Dh1.4 billion ($381 million), sources said.

It is also set to be the highest-profile example to date of a company receiving assistance from a special mechanism set up by the UAE’s banking federation to help firms struggling to repay debt, the sources said.

Launched in 2000, the privately owned company benefited from the boom in the UAE’s economy as it provided technology services to local businesses, more recently expanding into cloud computing and the Internet of Things.

Pacific Controls’ clients include a number of state institutions, such as Dubai Civil Defence and the Roads and Transport Authority, etisalat, as well as banks, hospitals and schools, its website showed.

It also has clients outside the UAE, such as Saudi Arabian telco Etihad Etisalat (Mobily) and King Abdullah University of Science & Technology (KAUST).

It has encountered difficulties in part because of delayed payments from some of its clients, the sources said, declining to specify which owed money or how much the firm is owed.

Pacific Controls has not made payments on short-term bilateral loans for working capital, sources said.

But payments related to a Dh1 billion longer-term facility had mostly been met, although the principal on a June repayment was only 80 per cent covered, one of the sources added.

“Pacific Control Systems group has been in the midst of an organisational restructuring exercise. The comprehensive exercise will help streamline the operations of the company,” the company said in a statement yesterday.

Confident

“The management of Pacific Controls is confident of a turnaround on account of Pacific Controls’ intrinsic technology innovation, investment in infrastructure and sincerity towards the purpose of the group and its operations.”

Given the importance of Pacific Controls to the local economy, the sources said that it was in no danger of collapsing and a solution would be reached.

Among the predominantly-UAE lenders on its main loan are Dubai Islamic Bank, National Bank of Fujairah and United Arab Bank.

One of the sources said the company had used shortterm loans to fund long-term capital expenditure projects. With revenue yet to accrue from these schemes, its cash flow position was then compounded by disruption from delayed payments.