Iconic Bahraini AC Brand in Restructuring
An iconic Bahraini company that has been a leading name in the air conditioning and refrigeration industry in the region for over five decades has succumbed to financial woes, marking a sad end to an era.
The company, established in 1970 with ambitious dreams of becoming the region’s top cooling and ventilation provider, has filed for liquidation, leaving behind a legacy of Bahraini craftsmanship and expertise embodied in three brands that had become synonymous for air conditioning in the region.
The curtain fell on the company’s journey after it, burdened by a debt of BD49 million, failed to secure an agreed-upon debt reduction from local banks. This, coupled with market challenges and rising operational costs, proved insurmountable.
The closure displaces a significant workforce of 220 Bahraini employees, adding to the Kingdom’s unemployment woes. Struggles began for the company in 2018, coinciding with market shifts and regulatory changes in key markets.
New specifications implemented without a transition period led to shipment rejections and financial losses. Additionally, changes in financial systems in another major market hindered payment settlements, further tightening the company’s grip.
Storm
Despite restructuring efforts, including workforce downsizing and capital injections from shareholders, the company couldn’t weather the storm. Liquidity issues and rising raw material costs further choked production, ultimately forcing the difficult decision to shut down.
The Ministry of Labour, informed of the company’s situation since January, has pledged to support the affected employees with 60% salary compensation for nine months. While this offers some respite, the closure of the company leaves a void in the Bahraini industrial landscape and raises concerns about the future of its employees.
