Department store Debenhams Retail Ireland owed its British parent and biggest creditor almost €40 million by the end of last August.
The 11-store chain sought High Court protection from its creditors this week after its owner, London-listed Debenhams plc, withdrew financial support from the business.
Debenhams Retail Ireland’s last accounts show that it owed its parent group €38.3 million on August 29th 2015, the end of its last financial year. Most of the debt was unsecured, interest-free and repayable on demand.
The group was the chain’s biggest creditor and had been providing its loss-making Irish division with a lifeline up to the point at which it withdrew support on Wednesday.
Revenue owed
The parent took a €55 million dividend from the Irish operation in 2013. Last December it committed to supporting Debenhams Retail Ireland for a further 12 months, which allowed it to stay in business.
The accounts show that at the end of August the Irish company owed suppliers a total of €7.8 million and the Republic’s Revenue a total of €4.6 million in tax and VAT.
Debenhams Retail Ireland had lost a total of €22 million over three years and had net liabilities of €5 million when it went to the High Court on Thursday to seek protection from creditors and have Kieran Wallace of KPMG appointed as interim examiner.
The move threw a question mark over the future of 2,265 jobs, either employed directly by the company or by concessions in the 11 stores. It is understood that concession holders will receive any money due to them as these liabilities pre-date the petition to the High Court.
If the court confirms Mr Wallace’s appointment he will have up to three months to put together a rescue plan for the company. Debenhams blamed excessive rents for the difficulties that forced it to go to court in the fist place.
Mr Wallace is shortly expected to begin talks with the chain’s landlords, including the Roche family, who sold nine Roches Stores outlets to the British chain in 2006. He can also ask the court to use its power repudiate the company’s leases.
The case mirrors those of other retailers, including Atlantic Homecare, B&Q, and Karen Millen, which had examiners appointed so they could restructure their leases and rescue their businesses.
