IMD-1-0238 © 2005
Hamilton, Stewart; Hutton, Sarah
Mannai Corporation; one of the largest and oldest private enterprises in Qatar was facing ruin by the end of 2000. A combination of events had led to the business reaching its large bank borrowing limits and with interest obligations Mannai was close to collapse. A consortium of the business's creditor banks stepped in to measure the situation and try to avert a crisis in the Qatar market. One of their first priorities was the appointment of a CEO that is strong and after some persuasion; Keith Higley; an experienced banker who had spent a significant portion of his career in the Middle East; taken the challenge.
Higley's first mandate when he took over as CEO of Mannai Corporation on 12 March 2001 was two fold: to keep the company afloat to allow reasonable values to be got for the numerous planned asset disposals and to make an enlightened choice concerning whether a work out was possible or not. A PricewaterhouseCoopers (PwC) report to the association of banks had summarized the alternatives available. Liquidation was the first option; which would prevent any additional rotation of losses but would limit the costs obtained for the assets to be sold. An option would be to sell the company as a going concern; but any potential buyer would necessitate a substantial write off of the Mannai debt. The third choice; probably the most insecure; was a work out including a restructuring of the business. Whatever the banks' decided regarding the longerterm future of Mannai; Higley needed to tackle some issues immediately.
Subjects: Turnaround; Management buyout (MBO); Restructuring; Debt-equity swap; Qatar; Middle East; Trading; Oil & gas related engineering; Fleet of oil rigs and support vessels
Settings: Quatar; Middle East; Trading (vehicles IT equipment);Trading (white goods travel service); Oil & gas related engineering and construction; Operation of fleet of oil rigs and support vessels; Turnover 2004 of approx. US$ 190m; employees 1450; 1999 – 2004
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