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.
Mannai Corporation (B) Back From The Brink Case Solution
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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