Construction giant Joannou and Paraskevaides Overseas said it was abandoning any plans to demerge after the appointment of Leoni Paraskevaidis and Efthyvoulos Paraskevaides to the board of directors of the company that has been having problems paying its workers in Saudi Arabia in recent months.
The appointments followed the July 3 removal of CEO Andreas Papathomas who was considered by the siblings as the problem.
According to a statement released by the shareholders, the new board of directors, which includes Leonidas and Christos Joannou, pledged to work closely together in line with the legacy of their fathers to tackle the challenges faced by the company.
“The members of the new board of directors will collaborate closely along the legacies of the company’s founders, Stelios Joannou and George Paraskevaides, to address long standing challenges faced by the company,” the statement said.
The new board has decided to work towards a single company, abandoning previous plans of separation.
“Given the alignment in vision and common values of the two families, the company’s new board of directors has decided to work together for one unified company, and to abandon the previous plans for a demerger.”
In a separate statement to staff, the board conceded that the company was faced with serious problems and pledged to do its best to tackle them.
“The company is currently facing several and significant challenges that should not be underestimated. However, the board is jointly looking to take all actions required to secure the good standing of the group.”
Among its first decisions as part of a policy of “swift and decisive action” was to cancel plans for a demerger and commit to pay staff their March salaries by July 12 using cash across the group’s territories.
The board also decided to pursue the aggressive sale of non-core assets including company aircraft and real estate in London, Cyprus and Saudi Arabia to secure liquidity and deleverage its balance sheet.
It also committed to a “contemporary corporate governance model” including the appointment of independent directors to the board and doing away with vetoes that led to deadlocks.
Staff in Saudi Arabia had refused to work last month over the company’s failure to pay their salaries since February.
The company’s problems became public in March when an earlier letter from the workers to Papathomas was leaked, detailing hardship because of being unpaid for months.
It had been reported recently that Efthyvoulos and Leoni had forced their mother Thelma off the board of J&P Ltd, the first company set up in Cyprus, because they considered her support for Papathomas the main cause of the problems.
The Paraskevaides family was split into two camps, Efthyvoulos and Leoni in one, and Thelma and her other daughter, Christina, and son-in-law Papathomas on the other.
J&P Overseas was established in Guernsey in 1961, 20 years after George Paraskevaides and Stelios Ioannou had established what turned out to a very successful company in Cyprus.
The company constructed or participated in the building of hundreds of largescale projects in Cyprus, including the Dhekelia and Moni power stations, the British bases – including RAF Akrotiri – water reservoirs, schools, hotels, highways, the fuel terminal at Vassilikos and the Limassol Marina.
Its overseas branch initially took over projects in North Africa and quickly expanded into the Gulf in the 1970s.