Mohammad Al-Mojil Group (MMG) has announced that its board of directors approved the signing of an agreement with GIB Capital, the investment banking arm of Gulf International Bank (GIB) in Saudi Arabia, to act as a financial adviser in its financial restructuring program with all debt holders, creditors and stakeholders.
“The business is now in a position to commence work on the financial restructuring of the company’s balance sheet,” MMG CEO Stewart Macphail said in a statement, posted on the Tadawul website.
“With the advice of a trusted and experienced institution like GIB, we hope to succeed in establishing how MMG can reduce and potentially eliminate the current negative net equity of the company by agreement with its lenders, suppliers and shareholders on a restructuring program,” he said.
Macphail said: “The work to operationally restructure the business remains ongoing but MMG has now reached a level of stability that both its board of directors and management believe will allow the company to improve its future financial performance and embark on a process to resolve its negative equity.”
Reuters added that the MMG Group had been in financial difficulty for some time, with shareholders rejecting a plan to liquidate the company in November after its accumulated losses exceeded 75 percent of its capital at the end of the third quarter.
The group replaced its chief executive and appointed KPMG to undertake a financial performance review last May aimed at raising efficiency and reducing expenses.
GIB Capital to advise MMG on financial restructuring
