Banks put hold on Al-Mojil’s cash balances

Al-Mojil Group said in a filing on Tadawul that:

1. Lenders refused to release its cash balances of SAR 44 million-- a decision that entails banks’ rejection of extending the deadline for the company to get a third party’s approval of buying its marine services sector.

2. The company’s chief executive officer conducted a phone conversation (on June 23, 2014) with the representatives of lenders who set certain conditions for releasing the said balances as follows:

• The company shall complete the selling of its marine services sector to an investor related to the chairman of one of the lenders within one week;

• The main investor or a new investor shall deposit a sum of SAR 170 million at a cash collateral account, and the sum will be released on completion of the sale of the sector; or

• The company shall sell other assets with equivalent value.

The company pointed out that it received a surprise notice from the credit agent claiming violation of the credit facility agreement signed with the lenders, thereby putting a hold on its balances.

It added that its chief executive informed the lenders that the company needs a sum of five million riyals to meet its commitments towards its staff, but the lenders insisted that their conditions shall be met.

The company said it was in its interest not to sell the marine services sector to the said party, as it signed a memorandum of understanding with a strategic partner (as announced on Tadawul on June 19, 2014) on this regard, and also given the possibility of developing the sector or selling it at market value that ranges between SAR 250 million and SAR 500 million.

The company confirmed its failure to pay staff salaries, and said the decision of lenders undermines its restructuring plan, and that it will necessary measure to protect its interests.