Woodies ready to invest to save Atlantic Homecare

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 granted to the chain, part of the Grafton Group, from its creditors from 70 to 100 days.

Last June, the High Court appointed Declan McDonald of PwC 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 extra 30 days were being sought by the examiner so he could finalise a scheme of arrangement, which if approved by the court would allow the business to exit examinership and trade as a going concern.

Lawyers for Mr McDonald said there have been talks with landlords over leases, which had proven successful. Further applications may have to be brought in relation to repudiating leases on a number of premises.

The court also heard that Woodies DIY is prepared to invest in Atlantic. That investment is 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.

In June, Mr Justice Brian McGovern was told an independent accountant’s report said the firm had a reasonable prospect of survival if a scheme was put in place including cutting staff numbers and closing stores.

The plan also involved renegotiating rents, which represented the largest liabilities and most of which were subject to “upward only” reviews. Examinership was sought by the directors of the company.

While having an accumulated loss of €21m for the last five years, the company had continued to trade with the support of other companies within the Grafton Group, in particular Woodies DIY, the court heard.

The company did not have cashflow issues.

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