Aref Investment Company KD127 Million in 2009 Losses Restructuring Ahead

AlQabas reports that reported Fiscal Year 2009 losses of some KD127 million (which is roughly KD20 million more than Aref's paid in capital).

The latest financials on the KSE are 30 September 2009.  At that point it had KD57 million in losses for the year.  Adding another KD70 million takes shareholders' equity to roughly KD175 million as opposed to KD304 million at fiscal year end 2008.  There are sufficient reserves to offset the losses and thus eliminate the legal problem of retained losses exceeding a substantial amount of paid in capital.  The possibility of a capital increase is also mentioned.

More troublesome for the company is the fact that current assets are only KD41.7 million versus current liabilities of KD347.6 million.

Current management is said to be working hard to clean the books. To draw a line between the old board and the new so that responsibility can be established.

KFH is credited with helping solve the problem of foreign debts by lending KD130 million.  Local debts (before the KFH loan) were reported at some KD73 million.  It should be noted that KFH owns some 53% of Aref. 

With KFH behind it and presuming that KFH is committed to using its financial resources to help, Aref should be able to work its way through the restructuring process.