MANAMA: Garmco, the Bahrain-based international aluminium rolling mill, has stabilised now and is producing more consistently, about a year after it went under court supervised restructuring.
The company’s chairman Basim Al Saie told the GDN that through the court system and the appointed trustees and the creditors committee, the board of directors is hopeful of starting the next phase of the restructuring.
He was speaking on the sidelines of Arabal 2019.
“At start of the new year, we see an opportunity to start some of the projects, like some imports and capital expenditure that would go towards improving our efficiency, productivity and competitiveness.”
Mr Al Saie said the company has invested $55 million in a state-of-the-art recycling and casthouse facility and would like to utilise it optimally.
The remelt facility was commissioned in 2017.
Garmco filed a voluntary petition for relief under Section 3 of Law No 22 of 2018 in January this year.
Also known as the Reorganisation and Bankruptcy Law, it enables companies with strong underlying fundamentals, but unsustainable financing structures, such as Garmco, to obtain the necessary protection to continue operating while undergoing a full reorganisation.
Garmco is the first company in Bahrain to make use of the new law, which is based on Chapter 11 insolvency legislation in the US.
The law provides companies in financial difficulty with an opportunity to continue to operate as usual even as they bring in structural changes to become solvent.
“The protections under the law have enabled Garmco to ensure the needs of our customers and suppliers are fully served, while the company pursues and finalises its reorganisation efforts, enabling Garmco to re-emerge as a globally competitive business under a sustainable capital structure for the long term,” the chairman added.
Meanwhile, a separate statement issued by the group yesterday said its annual subsidiaries meeting was held this week at the headquarters in Bahrain.
The meeting brought together the international management team spanning the Middle East, Asia, Far East, Australia, Europe and the USA.
Over four days, interactive sessions between the members of the global team were organised as an integral part of change management, team building and business performance review of all subsidiaries, which included talks about the new strategy, a complete business operations analysis alongside reviewing industry and economy forecasts of 2020.
Garmco general manager Mohammed Essa said as the group which serves over 2,000 customers in more than 45 countries, undergoes a corporate restructuring, “it is always stimulating to meet in person and compare experiences”.
“We are pleased to meet with our global team; the meeting helped chart a new path in Garmco’s team-building, decision-making and profitable growth process,” said Mr Essa.
Garmco has an annual production capacity of 165,000 tonnes of flat rolled aluminium products.
It was established in 1981 by the governments of Bahrain, Iraq, Kuwait, Oman, Qatar and Saudi Arabia.
Bahrain’s sovereign wealth fund Mumtalakat owns 37.29 per cent in Garmco.
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