Examiner confirmed at Atlantic DIY as investors make bid
THE High Court yesterday confirmed the appointment of an examiner to the Atlantic Homecare DIY store chain after a judge was told there had been two expressions of interest in investing in it.
Earlier this month, Mr Justice Brian McGovern appointed Declan McDonald of PwC as interim examiner after he was told most of the chain's 13 stores were trading at a loss.
The court heard, however, that the company, part of the Grafton Group, had a reasonable prospect of survival if a scheme was put in place that would include the closure of five of the stores and cutting staff numbers from 348 to 234. The plan also involved renegotiating with landlords about rents, which were the company's biggest liability and most of which were subject to "upward only" reviews.
The petition for examinership was made on behalf of the directors of the company which, although it had an accumulated loss of €21m for the past five years, had continued to trade with the support of other companies within the Grafton Group, in particular Woodies DIY.
A number of lawyers representing landlords told the court yesterday they were currently neutral on the examinership application but were concerned if rents did not continue to be paid they would then become the main creditors. The Revenue were also neutral, the court was told.
Bernard Dunleavy, for the interim examiner, said a report by his client was broadly positive and the stores involved had not been adversely affected by the examinership.
The examiner has also made contact with the landlords and is in the process of negotiating with them but it does appear applications will have to be brought in relation to repudiating leases on five stores.
The examiner believed the company had a reasonable prospect of survival and there had been two expressions of interest in investing in it -- one that was reasonably well developed, counsel said. The company did not have a cash-flow issue, he added.
Mr Justice McGovern confirmed Mr McDonald as examiner.