Al-Khodari reorganization procedure ‘positive’, says CEO

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.