Built to inform

Sign up for the daily newsletters

No, Thank you

Mohammad Al Mojil Group struggling for survival

Lenders freeze accounts as Saudi FAS funding deal falls through

NEWS, Business, Mohammad Al Mojil, Restructuring

The auditors of Saudi contracting giant Mohammad Al-Mojil Company (MMG) have said there are "multiple material uncertainties" about the company's abilty to continue as a going concern as the firm continued to rack up heavy losses, scuppering a potential rescue deal and causing its lenders to freeze accounts.

The Dammam-based company has revealed a 446% increase in losses for the three months to 30 June of $53.9mn (2013: $9.9mn), which means bringing the total losses declared by the firm in a three and-a-half-year period from the beginning of 2011 to 30 June to $741.5mn - or more than 200% of its issued share capital of $333.3mn (SR1.25bn).

As a result, the firm has "experienced further cash flow difficulties" and a rescue deal announced last month which would have seen two members of the Al Hokair family inject $147mn (SR400mn) in cash and loans through their Saudi FAS Holding business in return for a 40% stake in the business has been called off.

This news, and the fact that it said it would be unable to complete the sale of its marine business "on the basis previously proposed" has meant its banks have refused to release money in company accounts.

"MMG is not therefore in a position to make critical payments, including salaries," it said.

MMG's shares have been suspended from the Saudi Arabian stock exchange, Tadawul, for more than two years. Last month, the company appointed William Milligan as its third CEO in under three years.

"Negotiations are ongoing to resolve these immediate difficulties and to resume progress towards agreement of financial restructuring between all key stakeholders, including the lenders," it said in a statement to the stockmarket.

Most popular

Awards

Deadline approaches for CW Oman Awards 2020 in Muscat
You have until 20 January to submit your nominations for the ninth edition of the

Conferences

CW In Focus | Inside the Leaders in KSA Awards 2019 in Riyadh
Meet the winners in all 10 categories and learn more about Vision 2030 in this
CW In Focus | Leaders in Construction Summit UAE 2019
A roundup of Construction Week's annual summit that was held in Dubai this September

Latest Issue

Construction Week Middle East 11th Jan 2020
Jan 16, 2020