Al-Mojil Group shareholders reject liquidation
Al Khobar, November 6, 2012
Shareholders in Saudi Arabia's Mohammed Al-Mojil Group (MMG) have rejected the idea of liquidating the construction company, which is burdened by heavy losses and debt.
The company's recovery plan include asset sales, cutting bank debt and absorbing accumulated losses, it said in a statement to the Saudi bourse on Tuesday, after shareholders agreed on Monday to keep the firm running.
Restructuring efforts at the MMG, which is involved in oil and gas projects mainly for state oil giant Saudi Aramco, caused its quarterly loss to narrow from the previous quarter to 33.8 million riyals ($9 million) in the three months through September, the company said on Saturday.
In September it said its liabilities exceeded its assets and shareholders were left with a deficit of 279.8 million riyals after it ran into problems on some large contracts that included part of Aramco's Manifa oilfield development.
Accumulated losses in September exceeded 75 percent of its capital, forcing the company to call an emergency meeting to discuss whether it should be dissolved. Trading in its shares was suspended earlier this year.
MMG is involved in building part Aramco's Wasit gas programme, as well as the Aramco-Sinopec refinery in Yanbu, among others. It also has branches in the United Arab Emirates.
On Saturday, MMG said the construction of the Manifa development had generated a loss of 355.2 million riyals in the first nine months of 2012, as a contract with Italian firm Saipem had been terminated in its original form. - Reuters