Lack of credit final blow for Xtra-vision

A decision by credit insurers not to cover transactions was the final blow that led to movie rental chain Xtra-vision being placed into receivership, leaving more than 1,000 jobs hanging in the balance.

The company had no bank debt after exiting a receivership in 2011 with its rent roll reduced by around €5m. However, the withdrawal of credit insurance meant it could not secure trade credit and would have had to pay cash on delivery for all of its stock.

“Although Xtra-vision generated ebitda [earnings before interest, taxes, depreciation, and amortisation] of €1.5m in 2012 and is forecasted to do the same in 2013, it has become unable to meets its debts as they fall due as a result of the withdrawal of trade credit by a number of its key suppliers,” a company statement said.