Royal Jordanian Airlines (RJ) reported a JD192.5 million (US$271.4 million) loss until the third quarter as a total loss representing 70 percent of its capital value.
Financial data published by the RJ showed that the company’s loss amounted to approximately JD107.2 million in the first nine months of this year, compared to JD24.4 million for the same period of 2019.
The company also lost about JD40.4 million in the third quarter of this year, compared to about JD22.9 million loss for the same period of 2019.
The company’s current liabilities exceeded the volume of its assets by JD118.9 million the end of the third quarter of this year, according to the review report of the company’s interim financial statements, which stated that this indicates “the existence of a fundamental doubt about the company's ability to continue as a standing facility.”
Article 266 / A / 4 of the Companies Law stipulates that “if the company’s total losses exceed 75 percent of its subscribed capital, unless its general assembly decides to increase its capital, the company is compulsorily liquidated.” However, the report said that the cabinet mandated the Ministry of Finance to proceed with capital increase procedures by JD50 million (US$70.5) over five years, JD10 million annually, starting from January 1, 2021.
The report said there are “continuous discussions” that the company’s management is conducting with the cabinet and the Ministry of Finance to reschedule the capital increase to become within two years by JD25 million annually, starting from the current year, implying that messages of reassurance were sent by the Ministry of Finance to the RJ regarding a governmental intention to support the company’s activities.
The report also said that the company’s management is currently updating its business plan as a result of the outbreak of the coronavirus which had a significant impact on its work, including its ability to recover the value of its assets, as well as assessing the possibility of a decline in these assets.