Mannai Corporation (A): On the brink

In September 2000 Mannai Corporation, one of the oldest and largest private enterprises in Qatar, was facing ruin. A combination of events had led to the company reaching its substantial bank borrowing limits and it was in grave danger of being unable to meet the wages bill for its 4,000 employees. The Mannai Corporation had grown to become the biggest privately owned trading house in Qatar. Mr Ahmed Mannai, a prominent member of the Qatar establishment, had created from nothing a highly successful conglomerate with activities ranging from automobile sales and service through construction and into oil related marine activities. As recently as 1998, Mannai had hit the headlines when it became the subject of the first management buyout in the Gulf region. Ahmed Mannai had bought out his two partners with a small consortium of Gulf banks providing the $110 million bridging loan. Subsequently caught out by the slump in oil prices to less that $10 a barrel at the end of 1998 and the resultant slow down of activity in that sector and a general malaise in the local economy, the Mannai Corporation had run into serious financial problems. With interest obligations now approaching $1 million a month, Mannai had been brought to its knees. The year was supposed to be one of celebration for Mannai, marking 50 years of successful trading and expansion, not just in Qatar but throughout the Gulf region and beyond. Instead, its very existence was threatened. The company was facing a stark choice: to liquidate or somehow contrive a means of survival. If it were to be the latter, what would be the priorities and how would they be tackled?

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