Car dealer with debts of millions goes into liquidation
Published 12/08/2010 | 05:00
Another of the country's long-established car dealerships has gone into liquidation owing creditors millions of euro.
The closure of Tipperary-based Cashel Motors will result in the loss of 19 jobs, the Irish Independent has learnt.
The Citroen and Volvo dealership had been selling cars for 50 years but ran out of road after the economic downturn hit sales.
It is understood the liquidation was prompted by the Revenue Commissioners, which is owed VAT by Cashel Motors.
Aiden Murphy, from accountants Horwath Bastow Charleton, has been appointed liquidator to the firm and he will manage the winding up of the company by selling off its assets. He was appointed at a creditors' meeting at the end of July.
Accounts for the company show that the main shareholder in the firm is businessman David Wallace. Mr Wallace did not return calls from the Irish Independent yesterday.
The latest available accounts for 2008 showed that Cashel Motors warned two years ago that the company may no longer be able to survive.
Notes to the accounts stated: "The economic environment is challenging, the company has marked down the value of used car stocks on hand at year end and has reported a loss for the year."
In addition, Cashel Motors' debts exceeded its assets by just under €1m that year.
A number of banks had also taken charges on the assets of the firm, including property, according to the accounts.
Cashel Motors owed creditors €6m at the end of 2008, but the company is understood to have paid off some of its debts since then.
While the car scrappage scheme introduced in January has boosted vehicle sales this year, experts have warned that more troubled firms may emerge as the sector is coming out of its peak sales period.
The scheme offers vehicle registration tax relief of up to €1,500 for those eligible. As a result, new car sales were up 45pc year-on-year to 67,846 by the end of June, although coming off extreme lows in 2009 when 100 dealerships folded with the loss of 100,000 jobs.
Alan Nolan, director general of the Society of the Irish Motor Industry, said yesterday he was hopeful the bad old days of 2009 would not be repeated, but he remained cautious.
"The recovery is fragile. The car scrappage scheme did help boost sales, but we are entering a different trading period," he said.
Cashel Motors is the second car firm to go into liquidation in the past month after McKeon Motors also ceased trading.
The Co Meath-based BMW dealership is being wound up after it emerged it was no longer able to pay its debts.