(MENAFN - Jordan Times) Middle East Complex for Engineering Electronics and Heavy Industries (MEC) announced Sunday that 15 local and international banks agreed to reschedule its JD103 million of debts.
At a meeting held yesterday to announce the agreement, Industry and Trade Minister Hani Mulki said the government is also working with the banking sector to offer funds and to reschedule debts of other local financially-troubled companies, an attempt that seeks to revive the Kingdom's economy and to provide employment opportunities for Jordanians.
MEC said the negotiations and discussions with banks to receive their approval on the debt rescheduling took around nine months, after the public-shareholding company, listed on Amman bourse, agreed on financial and administrative restructuring including the increase of its capital from 100 million to 150 million shares through capital injection by Amman-based United Arab Investors Company and National Industries Holding Company from Kuwait.
Osama Khalili, MEC chairman, revealed at the meeting that the JD103 million will be repaid during five years with a two-year grace period at 5 per cent interest rate on loans offered in US dollar and 6 per cent on credit facilities in Jordanian dinar.
Banks involved in the rescheduling include Citibank, HSBC, Standard Chartered, Jeddah Islamic Bank, Opic Bank, Capital Bank, Housing Bank for Trading and Finance, Jordan Commercial Bank, Union Bank, Bank Audi, Arab Bank, BLOM Bank, Egyptian Arab Land Bank, Arab Banking Corporation and Jordan Ahli Bank.
Urging other financially-troubled firms to carry out administrative and financial restructuring to receive government and banks support, Mulki indicated that MEC will resume operations within two weeks, pointing out that the industrial company, which manufactures electronic and home appliances, will offer by the beginning of next year around 2,000 jobs.
Mulki said that within five years the indebted firm, which has 500 million of assets, will increase employment opportunities to 5,000 jobs.
"Majority of troubled firms are not operational now but they have substantial assets. So we hope they agree on administrative and financial restructuring to be able to help them stand up again," the official remarked, mentioning that during the boom period, these firms over-expanded without unevenly only to suffer from a severe slowdown from the global financial crisis
Noting that the JD103 million owed by MEC to banks represent around 10 per cent of the total non-performing loans in the country, Jawad Hadid, chairman of Jordan Commercial Bank, indicated that the bank will extend JD20 million in credit facilities to MEC to enable it import production material and resume operations.
Khalili said MEC will give priority to employees who were laid off, expecting the rescheduling to have positive impact on the bourse.
MEC along with other troubled blue chips listed at the Amman Stock Exchange were blamed by investors for the drop in the performance of the bourse for the past few months.
MEC manufactures electronic devices such as TVs, audiovisual electronic devices, home appliances such as washing machines, dishwashers, vacuum cleaners, microwaves, and blenders, in addition to electromechanical systems such as air conditioners, solar and water heaters and home heaters.
Sunday's meeting was held at the headquarters of the Ministry of Industry and Trade.
By Omar Obeidat