The embattled contractor has written a letter to Mohammed bin Salman explaining legal and financial troubles
Mohammad al-Mojil Group (MMG), the Saudi Arabia-based embattled contractor has written a letter to the kingdoms Deputy Crown Prince Mohammed bin Salman al-Saud, expressing fears that it may not be able to continue operating amid its financial and legal difficulties.
The letter to the Deputy Crown Prince has highlighted the difficulties posed by the lenders and the government, and legal restrictions that are hampering the board from performing its job, MMG said in a statement to Saudi Stock Exchange (Tadawul) without elaborating further.
The serious financial losses have led to great doubts over the companys ability to continue, according to the statement. It is not clear what sort of help it has sought from the all-powerful prince, who heads the kingdoms Council of Economic and Development Affairs (CEDA), the body responsible for Riyadhs agenda of transforming its hydrocarbon-dependent economy and plans to boost investments and develop alternative revenue lines.
The contractors shares have not traded on the bourse since July 2012, after the regulator suspended the stock over incurred losses.
It is trying to restructure its debts amid an economic slowdown and government spending cuts on the back of lower slide in oil prices. The company, which has slashed the number of employees to 3,000, from 25,000, claims it has yet to receive hundreds of millions of riyals for the work it has already completed.
The legal troubles deepened after the Saudi Arabias market regulator fined and handed down five-year jail sentences to founder Mohammad Al-Mojil and his son Adel al-Mojil, the firms chairman.
The Capital Market Authoritys (CMA) Committee for the Resolution of Securities Disputes (CRSD), which judges securities cases in the kingdom, in June fined MMG SR1.6bn ($427m) and recommended sentences for breaching rules relating to accumulated losses.