Logo of Abdullah A. M. Al-Khodari Sons Co.
Abdullah A. M. Al-Khodari Sons Co.’s (Al-Khodari) creditors rejected the financial reorganization proposal under the Saudi Bankruptcy Law, the company said in a bourse filing today, Aug. 5.
The decision was made in a meeting that was held under the supervision of the trustee, appointed by the Commercial Court in Dammam, Badr bin Hatim Al-Tamimi.
The results of the creditors' voting for each category will be submitted to the First Commercial Circuit in Dammam Commercial Court in accordance with the bankruptcy law, the statement added.
Shareholders recently had approved the financial restructuring proposal, under the Bankruptcy Law, Argaam reported.
The Commercial Court in Dammam accepted, on July 1, the company's proposed financial reorganization plan.
The proposal includes increasing the capital by converting the debts of all categories of creditors into shares of SAR 10 each, bringing the new capital to SAR 2.38 billion.
It further requires all creditors, except employees, to contribute SAR 3 per share, which will generate SAR 512 million in cash. This amount will be recorded as part of shareholder’s equity in the company’s books.
The company’s capital will be reduced by 92.11% to SAR 188 million to offset the accumulated losses and reduce it to less than 50% of capital as required by the Companies Law.
The financial reorganization plan considered the worst future possibilities to protect the company from any default that may arise and cause the proposal to fail.
There are no other solutions with the board other than what has been provided and will be the last chance for creditors and shareholders to protect the company.
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