AMMAN — The Jordanian Cement Factories Company said on Sunday that it was filing for insolvency, citing adverse financial conditions, worsening as a result of the novel coronavirus, as the reasons for the move.
Insolvency is a state of financial distress in which someone or a company is unable to pay its bills.
In a statement received by The Jordan Times on Sunday, the company said difficult financial conditions faced by the Jordanian Cement Factories Company, and which it said were exacerbated by the spread of the coronavirus, have led to a partial stoppage of its operational activities, in terms of sales, collection and production operations.
Consequently, the company has become unable to fulfill its obligations towards its employees, retirees and creditors, the statement added.
The company’s management has worked as part of a road map to restructure the company on developing plans to increase sales, production and operational efficiency; controlling costs, thus limiting the increase in burdens and future obligations, and thereby increasing liquidity. However, “the negative economic repercussions of the pandemic have impeded this progress”, according to the statement.
For these reasons, “the company today requests insolvency” so as to avoid liquidation, the company said.
Established in 1951 as a shareholding company with a capital of JD1 million, Jordan Cement Factories Company has been one of Jordan’s largest and oldest industrial companies.
In 1985, Jordan Cement Factories acquired the Southern Cement Company and raised its capital to JD60 million, according to the company’s website.
Jordan endorsed the Insolvency Law in 2018.