A DEAL that allowed advertising agency McConnells to walk away from millions of euro it owed to media businesses left Independent Radio Sales (IRS) with a €200,000 debt it has no hope of recovering.
IRS sells advertising space for local radio stations. It is currently the subject of a takeover approach from Radio Kerry.
Accounts filed for the seven months to the end of last year showed IRS was owed the money as a result of a debtor being taken into receivership in April 2010. The debt dated back to 2009.
IRS chief executive Dan Healy said unpaid debt was a result of the collapse of advertising agency McConnells. IRS was hit following the pre-pack receivership that allowed advertising agency DDFH&B to buy McConnells' assets without assuming its unsecured liabilities earlier this year.
The amounts involved are large for IRS but the bulk of the unpaid debt will be borne by its shareholders -- a group of local radio stations. It suffered a loss of €238,000 in the seven months to the end of 2009 and has provided for a bad debt of €15,000 as a result of the McConnells debt.
Mr Healy said the company was on course to end this year at close to break-even despite the advertising sector remaining tough. Cost cutting included a move to smaller premises in Dublin and fewer staff. Between 2008 and 2009, wage costs were almost halved, falling from €890,000 to €432,000 for a seven-month period.
IRS was not affected directly by the collapse of sister company Irish Network News (INN) last year. INN provided syndicated news services to local radio stations before going out of business in late 2009. Most radio stations took a replacement service from Newstalk.