Non - Performing Companies
The Social Security Corporation (SSC) invests in 105 companies, 8 are non-performing and 5 companies are expected to be so.
1. SSC owns 4,85% of the capitals of these companies amounting to 521,6 million JD.
2. The real value of shareholdings is approximately 22,44 million JD.
3. The value constitutes 0,81% of the equity portfolio amounting to approximately 2783million JD as on 31/12/2009 and constitutes 0,49% of the total SSIU investments that is approximately 4555 million JD for the same period.
4. The provisions designated to this investment are approximately 11.06 million JD, approximately 48,3% of the cost of these companies.
It is worth mentioning that SSC participated in all these non-performing companies or expected to be so, before the establishment of the Social Security Investment Unit except Tameer Jordan Holdings which was established in 2005.
Classifying companies as non-performing companies or expected to be so is made upon a clear set of standards. SSIU constantly works on analyzing these companies’ situations and setting solutions to bring them back to the correct track through cooperation with their management.
Subject: Basis for classifying non-performing companies or expected to be so.
First: Basis and Standards for Classifying Companies as Non-Performing or Would- Be Non-Performing Companies:
A. Non-Performing Companies:
1. Companies with accrued losses of 50% or more of the paid-up capital.
2. Companies with accrued losses for a period of 3 years consecutively amounting in total to more than 15% of the paid-up capital.
3. Inoperative or partially operative companies (for reasons not related to re-assessment) for a period of at least three months without indicating the reasons.
4. Companies whose capital has been re-structured by reduction while retaining accrued losses exceeding 20% of the new capital.
5. Companies whose general assemblies have not been held for more than two years.
B. Would-Be-Non-Performing Companies:
1. Companies with accrued losses for the first time exceeding 10% of their capital or for two consecutive years with losses exceeding 15% of their capital.
2. Companies whose capital has been re-structured (to insure elimination of accrued losses) or with losses not exceeding 20% of their new capital.
3. Companies with accrued operational losses for three consecutive years.
4. An evidence of poor management that indicates incapability of interacting with the different economic variables, or an emergency that fundamentally affects the Company’s financial position.
5. Companies resuming work after total or partial suspension.
C. Companies with accrued accounting losses for one financial period without affecting its capitaSl are excluded from being classified within the expected to be Non-Performing Companies.
Second: Basis for re-classifying the companies (from Non-Performing into expected to be Non- Performing Companies or going out of these two classifications into companies under liquidation) or (from expected to be non-performing into performing companies):
A. Companies moving from a non-performing state into expected to -be non-performing state (semi- non-performing):
1. Inapplicability of standard(s) classifying the company as a non-performing one by meeting one of the rules for classifying the company as expected to be non-performing company.
2. Companies which achieve profits after a series of losses for two consecutive years while retaining their accumulated losses below 20% of the capital.
B. Rules for the companies moving from expected to be non-performing state into a performing company:
1. Inapplicability of standard(s) which provides for classifying the company as one of the expected to be non-performing companies.
2. Companies which achieve profits that cover part of the losses lead , in result, accrued losses to reach less that 15%.
C. Rules for classifying the companies from the above mentioned two classifications into companies under liquidation: 1. Decision taken to liquidate the company on a mandatory basis.
2. Decision taken to liquidate the company on an optional basis.
Third: In case of selling a company, the company’s file should be withdrawn from the above mentioned classifications