Marlborough International receiver Mr David Hughes last night issued redundancy notices to a substantial number of its Irish staff. Mr Hughes began work at Marlborough yesterday after being sent in as receiver by Allied Irish Banks, which is owed an estimated €12 million (£9.45 million) by the recruitment group.
He is highly unlikely to be able to sell the recruitment company as a single unit. Informed sources have told The Irish Times the company's various divisions are likely to be sold separately. Industry sources believe that, while some of Marlborough's businesses are likely to be sold to trade buyers, others - particularly those most exposed to technology recruitment - might be difficult to sell.
Mr Hughes told The Irish Times he had secured short-term funding yesterday to meet payments to contractors - those who are paid by Marlborough and not by the company for whom they are actually working - and also to pay about 60 key staff who are being retained "pro tem" while the receivership progresses.
He added that he was forced to issue a substantial number of the remaining 140 staff in Ireland with redundancy notices last night. These were issued to staff in the Dublin office. The situation in Marlborough's regional offices has yet to be addressed.
The position for Marlborough's creditors is also uncertain. There are concerns that, once Marlborough's assets are realised, there may be little left to meet their claims once AIB's position as a secured creditor is settled. Mr Hughes said he was not yet in a position to quantify Marlborough's total indebtedness, although there is speculation that it may be as high as €18 million.
Mr Hughes has been appointed receiver over Marlborough's Irish operations and he said he had already received approaches from interested parties about sections of Marlborough's business. He accepted that it was likely that the company would be broken up and that a single buyer for the entire company was unlikely to emerge.
It is not yet clear whether a receiver has been appointed to the British operations. But a move in this direction is expected soon as the two British operations - Scot Jobs and Walker Hamill - are the two businesses which could be sold most quickly. The former management was well advanced on a sale of both businesses before one of the potential buyers was forced to postpone its bid.
Marlborough chief executive Mr David McKenna has already told The Irish Times that, if the two British operations were sold, it would have generated up to €8 million. This would be enough to meet a substantial portion of the estimated €12 million owed to AIB but much more cash will need to be generated from asset sales if Marlborough's non-bank creditors are to receive any money. Marlborough's total debts are estimated at between €15 million and €18 million.
Of the Irish businesses under Mr Hughes's control as receiver, the two most likely to find buyers are the Ann O'Brien secretarial business - bought for €5 million - and Professional Placement, which operates in the financial services industry. These are solid businesses, said one source, and also have the advantage of not operating under the Marlborough banner.
The other businesses are the Marlborough technology recruitment business, the Sylvia Grayn secretarial business in Northern Ireland and Kingston Technical Services in Galway.
