In the current market environment, companies are enduring challenges in meeting their debt obligations. A structured coordinated response is the best path to success in such conditions.
Factors impacting businesses in Bahrain
- Economic downturn and COVID-19 has impacted most of the key business segments adversely and exacerbated the already existing stress in the economy.
- Typical business models were largely trade finance dependent or working capital intensive.
- As businesses face challenges in recovering outstanding receivables in a timely manner, the working capital positions are being stretched.
- This is coupled with declining revenues, margin erosion and a fundamental change in consumer behavior.
These factors are leading to:
- Stressed balance sheets
- Unproductive assets
- Long working capital cycles
- Default in debt payments
- Delay in payments (both operational and financing)
- Cash flow issues
Organizations that do not face these challenges head on, understand the options and manage critical stakeholders, run the risk of financial impairment and potential business failure.