Saudi contractor Mohammad Al Mojil Group (MMG) has announced that its board of directors has decided to terminate the contract of CEO Stewart Macphail, who had been leading a battle to turnaround the ailing business for the past two years.
The company has appointed William Milligan as its CEO with immediate effect.In a statement, MMG said: "This resolution has been made to address the company moving forward with continuous improvement and phased re-structuring plans by strengthening both technical and engineering capabilities of executive and senior management".
It added that Milligan "has outstanding leadership qualities within the oil & gas and Power Sectors, with 20 years-plus experience in executive management roles in Saudi Arabia, UAE, China, Asia and Australia.
"The board wishes to thank Mr. Stewart Macphail for his efforts and contribution to the Company during his period of tenure."
Macphail was a company turnarounds specialist who was drafted in after the company had replaced its previous CEO Ibrahim Zadeh after just six months in the role. The firm experienced a series of disastrous financial results in 2011/12.
In an interview with CW last August, Macphail said that the company had taken "too many risks on too many large projects", which had led to it losing money on 13 of the previous 14 projects for which it had bid.
He embarked on a strategy of unwinding itself from loss-making contracts and from seeking revenues by supplying services in areas like fabrication, scaffolding and worker accommodation.
It seemed to be paying off. The company finished 2012 declaring a loss of $353mn on revenues of $373mn and its accumulated losses had reached over $550mn, with liabilities outweighing its assets by $261.2mn. A vote to break-up the company was dismissed by shareholders at an EGM in November 2012.
MMG still declared a loss of $34.7mn last year, but this was less than a tenth of the 2012 figure and it had extricated itself from many of the disastrous deals that had caused its decline. It also embarked on a strategy of utilising company assets like fabrication yards and accommodation to provide services to other contractors.
However, talks with lenders and stakeholders about restructuring its balance sheet had not been successfully concluded and the firm's shares have remained suspended from the Saudi stock market since July 2012.
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