WOODIES DIY is prepared to invest in a plan aimed at securing the survival of the Atlantic Homecare DIY store chain, the High Court heard yesterday.
Mr Justice Paul McDermott was informed of the proposed investment after he agreed to extend the period of protection from its creditors granted to the chain, part of the Grafton Group, from 70 to 100 days.
Last June the court appointed Declan McDonald of PricewaterhouseCoopers as interim examiner to Atlantic after the court heard that most of the chain’s 13 stores were trading at a loss.
Yesterday, the court heard the additional 30 days were being sought so that the examiner could finalise a scheme of arrangement which, if approved by the court, would allow the business exit examinership and continue to trade as a going concern.
Lawyers for Mr McDonald said there had been successful negotiations with some landlords concerning leases. Further applications may have to be brought in relation to repudiating leases on a number of the store premises.
The court also heard that Woodies DIY was prepared to invest in Atlantic. That investment was subject to the examiner’s proposed scheme being approved by all the relevant parties.
Mr Justice McDermott agreed to the extension and adjourned the matter to next month.
Mr Justice Brian McGovern last June confirmed Mr McDonald as examiner having been satisfied that the company had a reasonable prospect of survival. The judge was told an independent accountant’s report stated that the company had a reasonable prospect of survival if a scheme involving proposals, including the closure of some of its stores and cutting staff numbers, was put in place. The plan also involved renegotiating with landlords on rents. These represented the largest liabilities and most were subject to “upward only” reviews.
While having an accumulated loss of €21 million for the past five years, the company had continued to trade with the support of other Grafton Group firms, Woodies DIY in particular, the court heard.
The company did not have cashflow issues.
