MMG sells off marine division for $53.3mn
Struggling Saudi contractor to use money to pay off short-term loans
Struggling Saudi contractor Mohammad Al Mojil Group (MMG) has announced that it has sold off its marine services division for $53.3mn (SR200mn) to Jana Marine Services.
The deal, which includes all of the division's assets and crew, is part of an ongoing restructuring plan for MMG, which has just reported further losses of $26.9mn for the month of August alone, which has brought its accumulated losses over the past two and-a-half years to around $720mn (SR2.7bn), or 215% of its share capital.
Dammam-based MMG said the sale to Jana, which operates in the same city, is "a principal component of an asset sale programme" agreed with lenders back in 2012. The division mainly works for Saudi Aramco and had been trading at "close to break even", but had suffered from a lack of investment. The money raised will allow MMG to repay short-term loans.
MMG has been struggling for more than two years after signing a series of contracts in 2010 that proved to be heavily lossmaking.
In July, it revealed that a potential rescue deal with Saudi FAS Holding had collapsed and that banks had refused to release money from its accounts, meaning that it was "not in a position to make critical payments, including salaries".
Saudi FAS Holding, owned by two members of the Al Hokair family, had initially agreed to pump in around $147mn in cash and loans in return for a 40% stake in the business.