Frequently Asked Questions

Last updated on 31.01.2019

  • Reorganisation is a legal provision developed to allow companies in Bahrain to manage unsustainable debt situations. It is found in Chapter Three of Law No 22 of 2018.
  • In brief, reorganisation allows the Court to assess and modify a company’s debt, allowing the business to continue operating and leading to debt repayments becoming more manageable as well as protecting the company’s assets at the same time.
  • The original debt is not written off; rather the debt is simply re-organised to allow for a new schedule of payments to creditors. At the same time, the company continues its operations while also paying employee salaries.
  • Over the years, companies have helped finance its operations through debt agreements with creditors. Although we had hoped to be in a better position to meet some of these repayment requirements and have looked for ways to raise the money needed or attempt to refinance the debt, none of our attempts were successful.
  • Our shareholders felt that there was no other option but to seek the Court’s protection and file a voluntary petition for relief under Chapter 3 of Law No 22 of 2018.
  • Chapter 3 of Law no 22 of 2018 provides the time to assess the most viable options possible for the company without creditors taking immediate action. It introduces the option of reorganising our debt under the guidance of the Court, during which time we expect our operations to continue normally.
  • In our case, Chapter 3 is a protective measure and our day-to-day business will not be impacted. There may be some redefinition of job roles and reassignment of tasks to increase efficiency. Companies are expected to perform according to their standard and to provide their clients with the products and services promised.
  • Companies must have trust in the Court’s decision, and that it will be in the best interest of all its stakeholders
  • Law No. 22 of 2018 is considered as one of the important laws in the development of the business sector in the Kingdom of Bahrain in line with similar reorganization laws in well developed countries.
  • The aluminium market is promising, with current supply shortages, creating favourable market conditions for the company going forward.
  • Debt reorganisation and repayments will follow the Court’s plan in support of the company’s operations and future plans
  • Our employees are our most valuable asset and we look forward to continuing operations in the industry and surpassing customer expectations
  • Decisions related to our operations will be based on an assessment of our business needs.
  • Subsidiaries will not be affected by this process.
  • We will be open for business serving our customers and supporting them across all channels.
  • We will continue working with our vendors and suppliers under normal terms for goods and services.
  • A voluntary petition for relief under Chapter 3 of Law No 22 of 2018 was filed on 6th January 2019.
  • The petition was accepted by the court on 20th January 2019
  • While we can’t provide a specific date for the completion of the reorganisation, we intend to move through this process as quickly as possible.
  • The current senior management team remains in place and is committed to leading the company through the process.
  • The strong support of our stakeholders will allow us to complete the process on an accelerated basis.

GARMCO Re-Organization Protection Filing