Arabtec Holding Company decided, in a meeting of the General Assembly today, Monday, that it will submit as soon as possible a request to the competent court to declare the company bankrupt and liquidate it.
This decision was reached after a period of two months of discussions with key stakeholders, based on the decision taken by the shareholders at the General Assembly meeting held on September 30, 2020.
During the General Assembly, a request submitted by shareholders representing more than 5% of the company’s capital to cancel the company’s liquidation decision and authorize the Board of Directors to apply to the court to declare bankruptcy and liquidate it as soon as possible.
Shareholders representing 86% of the company’s capital voted not to cancel the previous general decision, which was voted on on September 30, 2020 regarding the non-continuity of the company and authorize the Board of Directors to apply to the court to declare bankruptcy and liquidate it, and to reject the decision on the continuity and restructuring of the company, which required approval 75% of the vote.
The general assembly decided, by majority, to absolve the members of the board of directors and auditors, and to reject the request to cancel the decision issued by the previous general assembly regarding absolving the members of the board of directors and auditors, and to agree to file a liability lawsuit against the members of the board and auditors.
During the general meeting, Antoine Abi Rashed, General Counsel and Secretary of the Board of Directors of Arabtec, said that the decision to liquidate the company is the only option available to the Board of Directors in implementation of what was decided by the previous General Assembly on September 30th, and this result is consistent with some of the subsidiary companies that will enter Also in the liquidation, and therefore there is no reason to take any decision to amend the schedule, and the company will file the bankruptcy application to the competent court as soon as possible.
He added that the company does not have liquidity or confidence in providing it to enable it to continue its business in light of the failure of its attempt to obtain liquidity from internal sources or financial support from banks, government agencies and stakeholders.
Abi Rashid pointed out that due to the weak financial position, the company has laid off most of its workers, with a total of 10,000 employees since the previous general meeting, except for a small percentage of necessity.
According to a statement by the company, the Board of Directors confirmed that it is no longer possible for the company to continue operating without entering into formal insolvency procedures, and that it has become in the interest of the stakeholders in the company to place the company under liquidation due to bankruptcy (subject to court approval) as soon as possible.
In view of the existence of links between some of the company’s subsidiaries, the application submitted to the courts will include that Arabtec Construction Company, Arabtec Construction Company, Arab Austrian Ready Mix Concrete Company and Arabtec Precast Company (collectively referred to as the affected companies) will also be placed under liquidation at the same time. And, at the present time, no application will be submitted to the competent courts regarding the other companies affiliated with the company, according to the statement.
Pending the appointment of an insolvency agent, the company will continue to communicate with the main stakeholders with the aim of looking for options that allow preservation of value, and to make efforts as much as possible to avoid subjecting these subsidiaries to formal procedures for declaring bankruptcy due to insolvency.
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