RJ’s accumulated losses reach JD400 million — company auditor

AMMAN — The auditor of the Royal Jordanian (RJ) company disclosed on the website of the Amman Stock Exchange that the airline’s accumulated losses amounted to approximately JD400 million by December 31, 2022, which exceeds its capital.

The company's current liabilities also exceeded its current assets by JD144.9 million, which suggests that “there is substantial doubt about the company's ability to continue”, Al Mamlaka TV reported.

According to the auditor, Article 266 of the Companies Law of 1997 stipulates that if the accumulated losses of a public shareholding company exceed 75 per cent of its capital, the company shall be liquidated, unless the general authority of the company decides at an extraordinary meeting to increase the company's capital or address the situation of the losses.

According to the auditor, the Council of Ministers on May 18, 2022 authorised the Ministry of Finance to proceed with raising the company's capital by JD70 million in two batches, JD35 million was received in May 2022 and the remainder was received in August 2022.

RJ CEO Samer Majali announced "extensive discussions" with the government aimed at improving the company's capital, while recording accumulated losses of up to JD400 million at the end of 2022, Al Mamlaka TV added.

Majali also spoke of "extensive actions with the government regarding possible actions to improve RJ's capital and modify the situation so that accumulated losses would be less than the capital.

He added that these measures are currently under consideration, and in the coming weeks the necessary action will be taken by the government.

Majali also referred to the "dire need to review the fuel prices for RJ", saying that the dramatic increase in fuel prices affected RJ last year.

In this regard, the CEO said that the equation of fuel supply and pricing for RJ is "vague", referring to attempts to get details on this subject, given the "huge" profits of the Jordan Petroleum Refinery Company (JPRC) that stands at some JD100 million this year.