* Shareholders to vote on whether to keep Drake & Scull operating
* Abu Dhabi’s Aldar drops after announcing spin-off plan
* But Dana Gas surges; Crescent to build back stake
* Banks slip in Saudi Arabia, strong in Qatar
* Qatar index hits 16-month high
By Andrew Torchia
DUBAI, Sept 12 (Reuters) - Middle Eastern stock markets mostly fell on Wednesday as a plunge by loss-making construction firm Drake & Scull dampened Dubai and a late wave of selling in Saudi Arabian banks dragged down that market.
Dubai’s index fell 0.8 percent as Drake & Scull plunged its 10 percent daily limit to a record low of 0.405 dirham, bringing its losses this year to 82 percent.
The company said shareholders would meet on Sept. 27 to decide whether to dissolve the company, under an article of United Arab Emirates company law requiring firms to vote on whether they should continue operating if their accumulated losses have reached half of issued share capital.
The firm subsequently issued another statement stressing its board and management would do their utmost to ensure it continued operating, but this did not boost the stock price.
Ajman Bank, which holds 13.06 percent of Drake & Scull shares according to exchange data, fell 2.1 percent. The bank said it had no exposure to the company and was holding the shares as collateral for a financing facility provided to local private equity firm Tabarak, which was the beneficial owner.
Abu Dhabi’s index fell 1.2 percent as Aldar Properties dropped 2.1 percent after saying it was spinning off its recurring-revenue assets worth 20 billion dirhams ($5.4 billion) into a new, fully owned subsidiary, which would help it raise capital more cheaply.
But Dana Gas rose 2.6 percent after Crescent Petroleum said it obtained approval to raise its stake in Dana to over 20 percent. As of early July, it owned 19.04 percent, according to Thomson Reuters data; its stake was diluted by the conversion of Dana’s convertible sukuk into equity.
In Saudi Arabia, the index fell 0.8 percent as Banque Saudi Fransi lost 2.0 percent and the biggest lender, National Commercial Bank, dropped 1.2 percent.
Petrochemical stocks opened strong after Brent oil surged near $80 a barrel overnight, but the sector closed lower with top producer Saudi Basic Industries losing 0.7 percent. Chemanol rose 2.1 percent, however.
MedGulf, which had jumped its 10 percent daily limit on Tuesday, added a further 5.3 percent to 16.00 riyals. Shareholders as of end-Wednesday will obtain tradeable rights to buy new shares at 10 riyals each.
Qatar bucked the downtrend with its index gaining 0.6 percent to a 16-month high. Qatar International Islamic Bank added 2.9 percent as buyers rotated through the banking sector, following strong gains by other Qatari banks earlier in the week.
SAUDI ARABIA * The index fell 0.8 percent to 7,635 points.
DUBAI * The index dropped 0.8 percent to 2,810 points.
ABU DHABI * The index lost 1.2 percent to 4,934 points.
QATAR * The index added 0.6 percent to 9,990 points.
EGYPT * The index fell 0.9 percent to 15,488 points.
KUWAIT * The index edged down 0.1 percent to 5,330 points.
BAHRAIN * The index fell 0.2 percent to 1,341 points.
OMAN * The index rose 1.0 percent to 4,531 points. (Reporting by Andrew Torchia; Editing by Ken Ferris)