Depa has lost its Dh900 million (US$245m) fit-out contract with New Doha International Airport in a blow for the interior design company's international ambitions.
Depa, renowned for fitting out the Burj Khalifa, the world's tallest building, is considering legal options after losing the biggest order in its history, it said yesterday.
"Depa Limited confirms its joint venture company Lindner Depa has had its contract terminated by Doha International Airport," the company said. "This follows the announcement on 20 June that Lindner Depa's performance bond and advance payment guarantee were pulled due to Lindner Depa's refusal to accept new non-favourable contract terms and conditions. The company is in discussions with its lawyers in order to assess the situation and consider its options."
Depa had been seeking to diversify away from its native UAE, where it had experienced slowing growth as a result of Dubai's property downturn.
The company and its German counterpart Lindner were hired in October last year to fit out 17 lounges at the new airport, billed as one of the world's most luxurious. The airport is slated to open later this year.
Depa's Nasdaq Dubai-listed shares were unchanged at 42.6 US cents yesterday following the announcement. Lindner Depa lost its contract performance bond and advance payment guarantee, worth a total of Dh177m, earlier this month. A performance bond is issued by a company to ensure the successful completion of a project.
The two payments were pulled after Lindner Depa objected to new contract terms and conditions, which it said included lack of access to the site.
These included "dropping all extension-of-time costs and acceleration costs, after being denied full access to the project site to perform its contract scope of work for the first nine months of this sixteen-month project", the company said at the time.
"As a result of the delay, Lindner Depa has not been able to start all of its interior contracting work on site as planned and, consequently, would not be able to meet its original contract completion date," the company said.
Excluding the airport contract, Depa's backlog is worth about Dh3bn in total, the company said last week.
Its other contracts in Qatar include the Dh118m Twin Tower Hotel and the Dh68.1m Doha City Centre. Its total backlog in the country amounts to Dh326.9m.
Representatives of New Doha International Airport could not be reached for comment.
Depa reported net losses for the first quarter of this year of Dh8.7m, compared with a loss of Dh19.3m during the same period a year earlier.