THE High Court has approved a survival plan for DIY chain Atlantic Homecare.
Mr Justice Sean Ryan gave his approval to the rescue scheme allowing the chain, which is part of the Grafton Group, to exit examinership and continue to trade as a going concern.
The court heard that under the scheme, fewer jobs will be lost and less stores closed by Atlantic Homecare than had been originally feared. More than €5.7m in fresh investment has also been secured from its Woodies sister chain.
The court also heard that all of the chain's creditors were in favour of the scheme.
Last June, the Court appointed Declan McDonald of PwC as interim examiner to the Atlantic Homecare unit after he was told most of the chain's 13 stores were trading at a loss. The subsidiary that entered examinership included four Atlantic Homecare outlets and nine Woodies stores. Grafton runs another 27 Woodies outlets that weren't part of the examinership process.
Examinership was sought by the directors of the company. While having an accumulated loss of €21m for the last five years, the company had continued to trade with the support of other companies within the Grafton Group, in particular Woodies DIY, the court heard. The company did not have cash- flow issues.
Counsel for the examiner, Bernard Dunleavy, told the court yesterday that the examinership process had resulted in a better outcome than had been originally anticipated.
It had originally been proposed to shut five stores. However, under the scheme before the court only two stores in the group, at Limerick and Newbridge in Co Kildare, will close.
There will be 44 redundancies, but that is 70 fewer than initially proposed. The subsidiary had employed 348 people across its 13 stores.
Counsel said that all classes of the chain's creditors had voted in favour of the plan and Woodies DIY was investing €5.7m in Atlantic Homecare.
Counsel added that the examiner had also negotiated with landlords about rents, which represented the chain's largest liabilities. The chain's difficulties, counsel said, were mainly due to the deterioration of the economy, high rents and its staffing levels being more reflective of the boom era.
Mr Justice Ryan said creditors seemed to get more out of the scheme compared to other examinerships. In the circumstances, the judge said he had "no hesitation" in approving the scheme. He fixed midday next Friday as the date on which the chain will formally exit examinership.