Examiner appointed to DIY chain Atlantic as investors express interest

The High Court yesterday confirmed the appointment of an examiner to the Atlantic Home Care DIY store chain after a judge was told there had been two expressions of interest in investing in it.

Earlier this month, Mr Justice Brian McGovern appointed Declan McDonald of PwC as interim examiner after he was told most of the chain’s 13 shops were trading at a loss.

The court heard, however, that the company, part of the Grafton Group, had a reasonable prospect of survival if a scheme was put in place which would include the closure of five stores and cutting staff numbers from 348 to 234. The plan also involved renegotiating rents, which were the company’s biggest liability.

The petition for examinership was made on behalf of the directors of Atlantic Home Care which, although it had an accumulated loss of €21m for the last five years, had continued to trade with the support of other companies within the Grafton Group, in particular Woodies DIY.

A number of lawyers representing landlords told the court yesterday they were neutral on the examinership application but were concerned if rents did not continue to be paid they would become the main creditors. The Revenue was also neutral, the court was told.

Bernard Dunleavy, for the interim examiner, said a report by his client was mostly positive and the stores had not been adversely affected by the examinership and continue to trade.

The examiner also made contact with the landlords and is in the process ofnegotiating with them but it does appear applications will have to be brought in relation to repudiating leases on five premises.

The examiner believed the company has a reasonable prospect of survival and there had been two of expressions of interest in investing in it, one which was reasonably well developed, counsel said. The company did not have a cashflow issue, he added.

Mr Justice McGovern confirmed Mr McDonald as examiner, saying he was satisfied from what had been outlined to him that the company had a reasonable prospect of survival.