Market leader linen company which employs 380 people goes into examinership - High Court told
A company which has been a market leader in the supply of linen to hotels, hospitals and the HSE, has gone into examinership.
Celtic Linen Ltd, which employs 380 people in Drinagh, Co Wexford, sought the protection of the court through examinership because it had become loss making in recent years.
Barrister Kelley Smith said the business had been in operation since 1926 and had been supplying bed linen, towelling and table linen to the hospitality sector and scrub suits, patient wear and ward linen to the healthcare sectors.
At the High Court on Thursday Mr Justice Michael Twomey appointed insolvency practioner Mr Tom Kavanagh of Deloitte Ireland as interim examiner of the company after hearing the company had a reasonable prospect of survival as a going concern if certain steps were taken.
Ms Smith, counsel for the company, told the court that an independent expert's report had stated the company could survive if it can secure new investment as well as reducing its costs.
Another step identified by the independent expert was that the examiner put together a scheme of arrangement with the company's creditors, counsel said.
Ms Smith said the company would also need to upgrade its equipment as its machinery was old and prone to breaking down. Its difficulties were due to its cost base being too high. It had also lost customers to new entrants into the market.
She told the court that last year the company put in place a project designed to restructure its business but certain aspects of the plan were unsuccessful.
Counsel said the company has liabilities of €14m and its biggest creditor, AIB bank, was supporting the application for the appointment of an examiner.
Ms Smith said that the company's debts exceed the value of its assets by €2.7m. If the firm was to be liquidated that deficit would rise to €9.3m.
She told Judge Twomey that the company has a 19% market share in the healthcare linen sector and 15% in the hospitality linen market and annually supplies 41 million pieces of linen from its facility at Drinagh.
The Judge adjourned the matter to a date in October.