DEPARTMENT STORE retailer Clerys is believed to be in “active” talks about the sale of the business to a private equity group, according to informed sources.
It is understood that IBI Corporate Finance is advising on the proposed transaction.
The sale of the family-owned business is believed to follow pressure from Bank of Ireland over its high level of borrowings, which were run up during the property bubble.
Earlier this year it was linked with Monte Carlo-based Michael Flacks and business restructuring specialist Hilco. Neither is thought to be involved in these talks.
Clerys, owned by members of the Guiney family for about 70 years, has been rumoured to be on the block for some time.
Latest documents filed with the Companies Registration Office show that group borrowings of €20.2 million to fund property development were due to expire in February of this year, along with working capital facilities of €10.4 million.
The company had shareholders’ funds of €3.9 million at the end of January 2011 and it granted Bank of Ireland security over all of its group assets in 2011.
In the 12 months to the end of January 2011, it recorded a loss of €2 million, up marginally on the deficit recorded in the previous year. Its gross turnover declined by 8.4 per cent during the year.
The accounts state that it was in negotiations to secure “adequate financial facilities”.
“The group depends on the continuing willingness and ability of its banks to finance group operations,” the accounts add.
The auditors’ report from PricewaterhouseCoopers noted the “existence of material uncertainties” in the retailer’s ability to continue as a going concern.
