RJ said it held an extraordinary General Assembly virtually on Oct. 3, 2023, headed by RJ Board of Directors Chairman Said Darwazeh. Attending were RJ Vice Chairman/CEO Samer Majali, board members, Companies’ General Controller Deputy, representatives of the Government Investments Management Company, RJ accounts auditor Ernst and Young, as well as some shareholders and RJ employees.
In the meeting, the General Assembly decided to decrease the capital from 324,610,470 shares/dinars to 123,627,470 shares/dinars through amortizing JD200.983 million from the balance of the accumulated losses amounting to JD385.157 million, by reducing the company’s capital to become the authorized and subscribed capital (123,627,470) shares/dinars. Also, the capital decrease will be executed through amortizing the value of the mandatory reserve amounting to JD14.808 million from the total accumulated losses, so that its value after amortization becomes JD385.157 million.
The General Assembly also decided to increase the company’s capital by 240,000,000 shares/dinars; so the authorized and subscribed capital becomes 363,627,470 shares/dinars, through covering the increase in the company’s capital by capitalizing 70,000,000 shares/dinars to the Government of Jordan/Government Investments Management Company, through payments under the company’s capital increase account shown in the company’s financial statements as of Dec. 31, 2022.
The company will cover the remainder of the capital increase of 170,000,000 shares/dinars through the Royal Jordanian Company owning 90% of the capital of the Jordan Airports Company, provided that the fair value is paid by raising the capital of the Royal Jordanian Company through the issuance of new shares in the company’s capital with a total value of 170,000,000 shares/dinars in favor of the shareholder, the Government Investments Management Company.
In his opening speech, Darwazeh said that RJ has been implementing a new strategy that has boosted its endeavor to project Jordan as a tourist destination and make Amman a gateway to the region, and, based on it, the company has further enhanced its product to better meet passengers’ needs.
Darwazeh added that Royal Jordanian, helped by continuous government efforts, is using all its resources to progress and emerge stronger from the crisis and the effects of the financial losses caused by the pandemic. In 2020 and 2021, the company recorded net losses amounting to JD235 million, in addition to the losses recorded by the company during the first quarter of 2022 due to the spread of the Omicron virus, and after that the Russian-Ukrainian crisis, which led to a steep rise in fuel prices in global markets.
In 2022, fuel prices went up by 69% and RJ had to pay the difference, which was a major reason for the loss. Despite the accumulated losses that exceeded 100% of its capital, the company did not write off the entire capital, but settled for writing off 62% of the capital in order to reach an acceptable ratio of accumulated losses to the capital.
Samer Majali said that the government recognizes the highly symbolic nature of the national carrier, which plays a strategic role in connecting Jordan with the world, and as such, it has been constantly supportive and taken appropriate measures to help the company in which it is the biggest shareholder. He noted that the new strategy has put RJ on the right track to continue its role as the national carrier.
He added that the restructuring of the company’s capital will help it modernize its fleet of aircraft and work in line with its strategic plan to increase its fleet size to 41. The airline has reached contracts to introduce new Airbus A320neo aircraft to serve medium-haul flights in the Middle East, the Arabian Gulf, North Africa, and Europe, and introduce new generation Embraer aircraft for regional routes. The first two E2s will join the fleet in mid-December this year; the airline will resume the modernization plan for its fleet at the beginning of 2026.
He stressed that as the national carrier, RJ is keen on further carrying out its mission to promote Jordan as an attractive destination through its travel offers and compelling services.
