Gulf Aluminium Rolling Mill files for re-Organisation protection

Gulf Aluminium Rolling Mill (GARMCO) yesterday announced it has filed a voluntary petition for relief under Section 3 of Law No 22 of 2018. The protection, GARMCO Chairman, Basim AlSaie said, will allow the company to pursue and finalise its re-organisation efforts. Law No 22 enables companies with strong underlying fundamentals, but unsustainable financing structures to obtain the necessary protection to continue operating while undergoing a full re-organisation.

“The protections under the law will enable GARMCO to ensure the needs of our customers and suppliers are fully served,” AlSaie said adding the move will enable “GARMCO to re-emerge as a globally competitive business under a sustainable capital structure for the long term.” The decision was taken during an Extraordinary General Meeting held on 6 January 2019. In a statement, Garmco said its performance during the past several years has adversely impacted by a number of factors despite strong underlying market fundamentals.

This, Garmco said, resulted in pursuing a wide range of initiatives to improve its operating profitability including the construction of a new state of the art re-melt facility to enhance its metal sourcing capability. During this period, GARMCO continued to face constraints under its financing agreements that needed to be fully addressed. In 2018, GARMCO said it pursued an accelerated effort to manage its financial liquidity and develop a comprehensive strategic, operating and financial re-organisation plan aimed at ensuring a globally competitive business with a sustainable capital structure.

Despite significant progress in developing core aspects of the re-organisation plan, GARMCO said it required additional time to build consensus among its stakeholders, including its banking partners. Subsequently, in order to meet its legal obligations and obtain the necessary protection to continue its efforts, the Shareholders of GARMCO decided to file a voluntary petition for relief under Section 3 of Law No 22 of 2018.