Saudi construction group MMG eyes break-up
Riyadh, September 23, 2012
Saudi Arabian construction company Mohammed Al Mojil Group (MMG) has called for an emergency general meeting in November to discuss breaking up, saying its losses now exceeded three-quarters of its capital.
External auditors called in by the company also found its liabilities exceeded its assets, leaving shareholders with a deficit of SR279.8 million ($74.6 million).
MMG said on the Saudi bourse website that its net losses after the second quarter came to SR1.53 billion and its net liabilities exceeded its assets by SR1.36 billion.
"These matters require the board to call an extraordinary meeting of its general assembly to consider and decide on whether the company should continue or dissolve," the Saudi company said in the statement.
To avert dissolution, MMG would need to raise capital so that its losses were back below three-quarters of the total.
The Saudi construction group attributed its losses to difficulties in large projects it was working on. MMG said it had been told by commercial banks that restrictions on some of its accounts had been lifted, giving it access to SR170 million, while one of its founding partners would supply any shortfall in cash flows up to SR100 million.
MMG in May sacked its chief executive and appointed PricewaterhouseCoopers to advise it on turning around its financial performance.
In July the Saudi stock market suspended trading of its shares because it did not announce its second quarter results on time.-Reuters