Amman Bourse relegates Royal Jordanian to third market

AMMAN – Amman Stock Exchange (ASE) downgraded Royal Jordanian's (RJ) listing from the second market into the third as of Wednesday. 

A circular issued by ASE Acting Chief Executive Officer Nader Azar on Monday,  attributed the relegation of Jordan's flag carrier to its financial difficulties as net shareholders' equity has dropped to less than 50 per cent of the company's paid-in capital. 

According to the circular, posted on ASE website, all purchase and sale orders  of RJ shares were to be cancelled by the end of Tuesday's trading sessions.

According to ASE regulations, there are several requirements for listing a company in the second market. 

Among these requirements, the net shareholders' equity in the company shall not be less than 50 per cent of its paid-in capital.

The percentage of the free float in the company shall not be less than (5 per cent) of the paid-in capital of such companies whose paid-in capital is less than JD10 million, excluding such companies whose capital equals or exceeds JD10 million.

According to financial results announced by RJ by the end of 2013, the airline's losses reached JD75.3 million last year, exceeding 75 per cent of its paid-in capital. 

RJ has been facing losses over the past years, which the company attributed to regional instability and high fuel prices. 

On July 27, the national carrier announced plans to stop its services to Delhi, Mumbai and Lagos, in light of the airline’s restructuring plan, including its route network.

 RJ will stop operating to Mumbai this week, to Lagos on October 10 and to Delhi on October 31, this year. With the closure of the three destinations, the RJ routes will count 51.

 RJ Chairman of the Board/President &Chief Executive Officer Nasser Lozi said the decision is part of a synchronised plan to turn around the airline covering operations and financial structure. The move comes at a time whilst RJ is facing difficulties due to the instability in the region and high fuel prices.