panceltica report from building magazine

Panceltica bosses flee Qatar over jail fears
12 June 2009

By Tom Bill

The managers of Qatar-based structural steel contractor Panceltica have fled the country over fears they face jail as a legal wrangle with local developer Barwa escalates

It is understood that chief executive David Ball and several key managers decamped to Dubai last month and are consulting lawyers about their next move.

The row relates to a $343m (£210m) 2,000-unit residential scheme built for Barwa in Doha, the Qatari capital. The job remains unfinished after a dispute surfaced last December between Barwa and Panceltica over issues such as contract variations, the settlement of subcontractor deals and potential damages due to delays.

According to a source close to Panceltica, Ball moved to Dubai after being told that under Qatari law he faced prison or having his exit permit withdrawn if the firm wrote cheques that bounced.

The source said: “Panceltica is not getting paid because of the dispute, a situation made worse because Barwa is its only client.”

Panceltica declined to comment.

“Panceltica is not getting paid because of the dispute – Barwa is its only client”

Source close to Panceltica

Barwa is also an investor in Panceltica, which is listed on the alternative investment market (AIM). In January, Barwa upped its stake from 14% to 20% by way of compensation for the delayed scheme, and last month

it emerged Panceltica was considering allowing the developer to take over the whole of its Qatari operation.

In a fresh twist, a second boardroom row broke out on Tuesday when 26% shareholder Strategic Partner, which is backed by Dubai-based private equity firm Ithmar Capital, called for the non-executive directors to be removed and the firm to be de-listed. Its motives are unclear.

The company, whose turnover was forecast to be £152m in 2008 before the row, floated on the AIM in March last year with a market cap of £236.4m, which has since shrunk to £5.32m.

Comments

Shyams
Shyamsye
There were a lot of issues raised previously by a QLer...Nefertiti .....about this company...here: http://www.qatarliving.com/node/100081 Its really sad .....Big Giants of Qatar like Barwa have trouble choosing good contractors. If the NOC was not required this company would not have existed at all because of nonpayment of labour salary, the laborers would have left this company. Now it seems they have duped not only the labourers but also the client. ....now tell me how did the NOC/Exitp Permit save the client from the escaping contractor? NOC & Exit permit are abused by such contractors for their own benifit.
I believe barwa refused to pay for extra work done and have dried up finance to enable them to take full control of panceltica or have the liquidate. bad news for those left working there.
wait and watch is the best policy at times of these. as hardly anyone knows the truth...
The entire Qatar market is looking aout the outcome of anceltica project and about the company. There was a news about the take over of this company by Barwa. But still discussions and negotiations are going on. Hope Barwa can take over this company and can give resolutions for their current issues. Also Barwa will get benefits by owing it's technology and fast tracks. Heard Barwa has taken over a lot of small companies. So this will be happening.
interesting.
Developer row pushes Panceltica to the brink 26 June, 2009 By Tom Bill Steel contractor says it won't be able to continue if its Scottsdale and Qatari businesses are sold Qatar based structural steel contractor Panceltica has raised the possibility it could be wound up as a dispute with Qatari developer Barwa escalates. In a trading update this morning the AIM-listed firm said the row had forced it to consider the sale of its steel technology group Scottsdale in addition to its Qatari operation. It said: “Following such disposals the company would not be in a position to continue as an independent business and the board would seek to arrange a sale of the company and in the absence of which would proceed with winding up the company.” Earlier this month Building revealed that the Panceltica top management team had fled the country over fears they face jail because of the wrangle with Barwa. It is understood that chief executive David Ball and several key managers decamped to Dubai in May and are consulting lawyers about their next move. The original row relates to a $343m (£210m) 2,000-unit residential scheme built for Barwa in Doha, the Qatari capital. The job remains unfinished after a dispute surfaced last December between Barwa and Panceltica over issues such as contract variations, the settlement of subcontractor deals and potential damages due to delays. According to a source close to Panceltica, Ball moved to Dubai after being told that under Qatari law he faced prison or having his exit permit withdrawn if the firm wrote cheques that bounced. The source said: “Panceltica is not getting paid because of the dispute, a situation made worse because Barwa is its only client.” Barwa is also an investor in Panceltica, which is listed on the alternative investment market (AIM). In January, Barwa upped its stake from 14% to 20% by way of compensation for the delayed scheme, and last month it emerged Panceltica was considering allowing the developer to take over the whole of its Qatari operation. The company, whose turnover was forecast to be £152m in 2008 before the row, floated on the AIM in March last year with a market cap of £236.4m, which has since shrunk to £5.32m
what will happen to the banks that Panceltica is dealing with? any news who they are?
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