650 jobs to be saved at Elverys in buyout deal
Management team set to win in battle for iconic sports chain
Published 30/03/2014 | 02:30
THE 'David and Goliath' battle for control of retail chain Elverys Sports is close to concluding, with victory said to be in sight for its Mayo-based management team.
Sources told the Sunday Independent that the Management Buy Out (MBO) headed up by Elverys' managing director Patrick Rowland is poised to beat off stiff competition from five other bidders for the business, including Sports Direct, owned by UK billionaire Mike Ashley, who also owns Newcastle United.
As part of the proposed deal, it is understood Elverys' management team has given a commitment to the company's examiner to preserve the jobs of all 654 employees across 56 stores, once certain terms and conditions are met.
A spokesman for the management team declined to comment yesterday.
It will now fall to the examiner to put the details of the proposal to the High Court for approval. Pending this, the company will remain under the court's protection from its creditors, which include Nama, which is owed in the region of €23m, the Revenue Commissioners, various trade creditors and landlords. Since making the decision to put the company into examinership last February, Nama has been funding the payment of its suppliers and staff wages.
Should Mr Rowland and his team manage to secure the company, it will bring to an end several months of drama which at its height saw Taoiseach Enda Kenny coming in for heavy criticism from within his own constituency over his alleged failure to intervene to protect the jobs of the 200 people Elverys employs in Mayo alone.
In a statement to this newspaper two weeks ago, a spokesman for Mr Kenny defended his refusal to involve himself in the matter, saying that while he wanted to see the situation resolved, the company was in an "examinership process and therefore it would not be appropriate to comment further".
Were the acquisition by management of the company to receive the approval of the High Court, it would represent a major coup for Mr Rowland and for his team given how their original MBO bid fell through at the last minute on January 31.
Having secured the funding from AIB for the €10m buyout on that occasion, the management team was unable to draw down the monies on time as it had not fulfilled all the bank's preconditions.
Explaining Nama's decision to put the company into examinership, a spokesman said: "The proposed receivership appointment required to give effect to this transaction could not proceed because the proposed receiver advised he would be legally obliged to consider an alternative, higher bid that had been made in writing to him.
"The MBO transaction was to have been completed prior to the emergence of this new bid but could not because the MBO team was unable to draw down the necessary funding as they did not fulfil all the bank's preconditions. There is an onus on any purchaser of any asset to ensure that they are in a position to draw down their funding from their bank to complete the transaction."