Xtra-vision survival scheme gets green light
Published 30/07/2011 | 05:00
The High Court yesterday approved a survival scheme for the Xtra-vision chain of stores.
The company, which operates more than 160 stores and employs over 1,200 people across Ireland, was granted court protection from creditors last April after it said it was insolvent and unable to pay its debts as they fell due owing to cash-flow difficulties.
Yesterday Mr Justice Brian McGovern approved the scheme after being informed by examiner to the company David Hughes, of accountancy firm Ernst and Young, that the proposal was "in the best interests of the creditors, the employees and all concerned with the company".
The judge's approval will allow the movie rental firm to emerge from examinership on August 4 next and it will continue to trade as a going concern.
The court gave its consent after being informed the scheme had the approval of most classes and individual creditors, including the Revenue Commissioners.
The court heard that under the terms of the scheme Birchall Investments, which bought the chain from US firm Blockbuster in 2009, will invest another €8m in the company. Agreement on leases with landlords have also been entered into, which will reduce the firm's overheads.
Various classes of the company's creditors will receive between 90pc and 8pc of what they are owed. In addition, 17 loss-making stores have been closed. And while the vast majority of the workforce has been retained there have been 91 redundancies, 45 of which were voluntary.
Xtra-vision's difficulties were caused by various factors including falling revenues, a decision by two providers of trade credit insurance to Xtra-vision's suppliers to withdraw their coverage and poor trading figures caused by the bad weather over Christmas and New Year period.