PROJECTS: 'Construction start-up Katerra's US bankruptcy filing won't impact Saudi operations' - statement

Katerra has been contracted to build housing units for Saudi Arabia's National Housing Company

  
Mock-up villa developed using Katerra Saudi Arabia's off-site construction technology

Mock-up villa developed using Katerra Saudi Arabia's off-site construction technology

Troubled construction start-up Katerra’s Saudi operations head said on Monday that the company’s local operations won’t be impacted by the parent’s bankruptcy filing in a US court.

Earlier this month, following a thorough review of their strategic alternatives, certain Katerra United States and Cayman Island affiliates voluntarily filed for Chapter 11 relief in the United States Bankruptcy Court for the Southern District of Texas.

Katerra Saudi Arabia President and CEO Ghassan Mirdad said: “Katerra has multiple projects and activities underway across Saudi Arabia. The company is both committed to the completion of all on-going projects and is actively seeking new projects.

Katerra Saudi Arabia President and CEO Ghassan Mirdad

A press statement issued by the Saudi unit said the Chapter 11 filing “does not include or impact the day-to-day operations of Katerra’s international affiliates, such as Katerra Saudi Arabia and Katerra India.”

The Saudi and Indian operations constitute ‘non-debtor entities,’ according to the Chapter 11 petition.

Katerra has been awarded a contract to construct approximately 14,000 housing units for Saudi Arabia’s National Housing Company.

“Katerra may have a dozen sites under construction by the end of the year with five manufacturing facilities currently operational in the Kingdom,” the statement said.

In a statement posted on its website on June 6, the Softbank-backed company blamed the rapid deterioration of its financial position on the macroeconomic effects of the COVID-19 pandemic on the construction industry, inability to procure bonding for construction projects following the unexpected insolvency proceedings of Katerra’s former lender, and unsuccessful attempts to secure additional capital and business.

The insolvency proceedings against Katerra were launched by former lender, British fund Greensill Capital, which itself had filed for insolvency in the UK and Chapter 11 in the US in March, when its main insurer stopped providing credit insurance on $4.1 billion of debt, according to various media reports, including Reuters.

In June 2018, Katerra had announced that it was merging with KEF Infra, an India-based offsite manufacturing technology company founded in 2014 by Dubai-headquartered KEF Holdings.

(Writing by SA Kader; Editing by Anoop Menon)

(anoop.menon@refinitiv.com)

Disclaimer: This article is provided for informational purposes only. The content does not provide tax, legal or investment advice or opinion regarding the suitability, value or profitability of any particular security, portfolio or investment strategy. Read our full disclaimer policy here

© ZAWYA 2021