The creditors of Abdullah Abdulmohsin Al-Khodari Sons Company rejected the company's financial reorganization proposal.
According to Arabiya Net, the company said that the creditors' vote meeting was on the proposed financial reorganization of the company proposed under the Saudi bankruptcy law, which was carried out under the supervision of the financial reorganization trustee appointed by the Before the commercial court in Dammam and held by means of modern technology.
The Al-Khodari Company stated that the detailed results of the creditors' vote for each category will be deposited with the First Commercial Circuit of the Dammam Commercial Court in accordance with the provisions of the bankruptcy law.
Al-Khodari had announced last July that the proposal to conduct a financial reorganization, which was accepted by the Dammam Commercial Court, included increasing the company's capital by transferring the debts of all categories Creditors amounting to about 1.826 billion riyals, for shares worth 10 riyals per share, bringing the new capital to about 2.384 billion riyals.
The proposal also includes a cash support provided by all creditors with the exception of employees of 3 riyals for each new share. This support will result in a cash amount of 512 million riyals, which will be recorded within Equity in the company's accounts.
It clarified that the capital increase will be used through converting debts into shares as well as cash support in amortizing the accumulated loss, and the company's capital will be reduced by 92.11% to reach 188 million riyals, with the aim of extinguishing the company's accumulated losses and reducing them to less than 50% of the capital, according to the requirements of the Companies Law.
The company stated, that the board of directors did not find the plan of the financial regulation proposal viable at the time of its appointment, and therefore it was keen that the plan of the financial regulation proposal take into account the worst future possibilities. To protect the company from any default that may occur and cause the plan to fail.
She continued: There are no other solutions for the board of directors other than what was presented, and it will be the last word for creditors and shareholders.
