Atlantic Home Care Ltd, part of Irish builders merchant chain Grafton Group has filed a petition to appoint an examiner, giving it Court protection.
Under Irish law, an Examinership process is designed to facilitate the survival of a company through the formulation of proposals by the Examiner of a compromise scheme of arrangement.
Atlantic is a member of the DIY Division of the Grafton Group operating in Ireland and was acquired as part of the Heiton Group in 2005. The business has been severely impacted by the recession, in particular by the decline in consumer spending and in the housing sector. In addition, the Company’s ability to reduce operating costs has been inhibited by the retention of “upward only” rent reviews for existing leases.
Atlantic accounts for 2.75%of Group revenue and has traded at a loss since 2007. The turnover of Atlantic has fallen by 44% from €100m to €56m in that period and it continues to trade at a loss in the current year.
The DIY Division as a whole has traded successfully and profitably in a demanding retail environment throughout this period but its performance has been held back by the Atlantic losses. These losses are no longer sustainable and a restructuring of Atlantic via the Examinership is intended to bring these to an end while maximising the potential for the business to survive.
Woodie’s DIY Ltd is prepared to continue supporting Atlantic throughout the Examinership and has also indicated that it would be prepared to invest in the Company to facilitate a scheme of arrangement for the restructured business.
Atlantic has no bank debt and is not part of the Group’s financing arrangements and accordingly, this development will have no impact on financing and trading arrangements in the Group and its other subsidiary companies in Ireland, the UK and Belgium.