The financial reorganization of Abdullah A. M. Al-Khodari Sons Co. is “positive”, as it insulates the company from termination by force of law, chief executive officer Fawaz Al-Khodari told CNBC Arabia on Tuesday.
“The reorganization procedure gives Al-Khodari more time to finalize its restructuring plan and negotiate with creditors,” Al-Khodari said.
The construction firm’s restructuring plan is 70 percent complete.
“It is difficult to complete the turnaround of a large company like Al-Khodari and reach agreements with creditors in 90 days,” he noted.
Al-Khodari owes SAR 750 million to banks and SAR 500 million to other creditors, including subcontractors and service supplies, Al-Khodari stated.
On July 1, Dammam commercial court issued a ruling on commencing a financial restructuring procedure for Al-Khodari under the bankruptcy law.
Related: Dammam Court says Al-Khodari’s financial restructuring to be initiated
Saleh Abdullah Al-Naeem was also appointed as a secretary for the required financial restructuring.
Reorganization is a process designed to revive a financially troubled or bankrupt firm. It also involves the restatement of assets and liabilities, as well as holding talks with creditors in order to make arrangements for maintaining repayments.
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