DUBAI: Dubai contractor Drake & Scull International is prepared to take on debt to make a substantial acquisition as it eyes strategic purchases, possibly in India, its chief executive said on Tuesday. "We are still very liquid," Drake & Scull CEO Khaldoun Tabari told reporters on the sidelines of a conference, adding the company was interested in acquisitions in India and had 500 million dirhams ($136 million) in cash. "Acquisitions in 2011, definitely India is a big possibility." Asked about the possibility of issuing debt to pay for a big acquisition, Tabari said: "Very possible (to tap bond market) if there's an acquisition of substantial value. The market is very ripe for that." Shares in Drake were down slightly by 0.4 percent at 0805 GMT. Drake, which specializes in mechanical, engineering and plumbing businesses (MEP), has been rapidly expanding its operations outside Dubai, where house prices have plunged some 60 percent since their peaks in 2008 as a result of the financial crisis. Drake & Scull reported a sharp 45 percent drop in quarterly profit this week, below expectations, triggering a share sell-off. Tabari said Drake's order book would expand in the last three months of 2010. "The backlog by the end of third quarter is 4.9 billion dirhams. We expect the backlog by the end of the year to have substantially more than what we have today," Tabari said. On Monday, Tabari had projected an additional 1 billion dirhams worth of new projects to be added to the book. But Tabari also warned that unless home buyer financing became more available, housing prices in the UAE could see a further decline, and that Abu Dhabi and Saudi Arabia will generate the majority of the new projects. Tabari said that Drake would likely announce a second acquisition of a Saudi business within a week, following its agreement to buy 65 percent of 'Drake & Skull International Saudi WLL' for 243 million dirhams.
