The Court of Cassation, the highest court in the land, has recently accepted an insolvency filing by Lafarge Jordan Cement, otherwise known as “Jordan Cement Factories”, and rejected all appeals to have the filing turned down.
The company lodged the filing under the insolvency law in order to avoid liquidation due to the difficult financial conditions exacerbated by the corona pandemic, and after it became unable to fulfill its obligations towards its employees, retirees and creditors.
The accumulated losses of the company amounted to about JD120 million, while its capital is JD60 million.
In a statement, the company said the court’s decision will allow it “to continue its reform process, so that it is able to meet its obligations under the insolvency law that was enacted to protect the creditor and debtor at the same time, and protects the investor or the trader of risking their money.”
It indicated that the court’s decision, the first of its kind in the Kingdom, moves the company to the second stage of insolvency, which requires preparing a plan for recapitalization.
According to the statement, the company intends to adopt a well-thought-out and actionable financial plan to pay off its debts and meet its liabilities within reasonable legal periods and in agreement with creditors.
The company has two factories, one of which is in Fuheis but has been offline since 2013. The second is in the Rashadiyah area, south, which has two production lines; one has been out of service for more than 10 years while the other operates at 40 percent of its capacity.
The company cited weak demand and inability to compete in light of the high variable operating and administrative costs as the main reasons for its financial hardship.
Source: Jordan News Agency