Examiner to B&Q Ireland confirmed by High Court
The High Court has confirmed an examiner to B & Q Ireland Ltd which operates nine home improvement stores across the country employing 690 people, of whom 500 are part-time workers.
As part of further cost-cutting proposals, the company's two stores in Athlone and Waterford are to close with the "regrettable" loss of 92 jobs - 69 part time and 23 full time, Mr Justice Peter Kelly noted.
A key ingredient for the survival of some of the company's other stores includes renegotiation of what the judge described as "extraordinary" rents. The total rent roll for the nine stores is €11.6m a year, some €5.8m above market rates, the court heard.
Declan McDonald, who was appointed interim examiner to the company late last month, had been encouraged by expressions of interest from four potential investors in addition to the company's parent, Kingfisher plc.
Rossa Fanning, for the company, presented letters to the court in which Kingfisher, owed some €17m by the company, indicated it was prepared to support the company through the examinership process and to invest in it on certain conditions, including implementation of a cost-cutting programme and the successful negotiation of a survival scheme.
Kingfisher wrote to the company late last month saying the business was not sustainable with its current cost base and the levels of support required was no longer feasible. Kingfisher also indicated it would provide financial support to the company if it was under court protection so as to enable it meet the cash flow projections in an independent accountant's report. Kingfisher also indicated it would be intersted in making new investment in a restructured business of the company.
Mr Justice Kelly said today he was satisfied to appoint Mr McDonald as examiner. There was no opposition to the proposed appointment while the Revenue Commissioners took a neutral position. There are no arrears owed to the Revenue and the company has undertaken to meet payments due shortly to the Revenue, totalling about €1.25m.
The judge said the situation of the company had aspects which were both "depressingly familiar" and "refreshingly new". It was depressing familiar in that it was bedevilled with a fall of some 34 per cent in revenue since 2009 and it was also obliged to pay extraordinary rents.
Its turnover had fallen 24.2pc from a peak €124m in 2009 to some €94.2m in the financial year to end January 2012.
The refreshingly new aspect was that the company had no bank debt and had no arrears to the revenue, he said.
He was satisfied from the material before the court the company, provided certian conditions were met, had a reasonable prospect of continuing to trade and to be run in a profitable way into the future.
The examiner would have a lot of work to do, including renegotiation of rents, but the court hoped this examinerhsip would conclude quickly, the judge added.
The court previously was told all vouchers, credit notes and deposits will be honoured by the company throughout the examinership period.