B&Q Ireland rescue plan
Published: 03 May, 2013
Suppliers to B&Q’s failed Irish operation are being offered 1 percent of the EUR3.3m due to them in the proposals to rescue the DIY chain, which has been under High Court protection from its creditors since January.
The High Court appointed Declan McDonald of PricewaterhouseCoopers as examiner to the Kingfisher-owned chain in January in a bid to rescue the business, which was heading for a loss of EUR20m this year and was crippled by excessive rents. The rescue plan proposes that suppliers accept 10 percent of the amount due to them in settlement of the EUR3.3m debt.
It also proposes that B&Q’s main creditors, its parent and associated group companies, will not receive any of the EUR22.4m due to them. At the same time Kingfisher will put EUR2.4m back into the business by way of an equity investment.
This cash will be used to pay the examiner’s costs, the 10 percent due to trade creditors and to provide working capital to the company. Preferential creditors – including the Revenue Commissioners – that are owed EUR1.9m, and a number of local authorities, will receive all of what is due to them.
The creditors affected voted in favour of the proposals, although the document shows that only a narrow majority of the 80-plus suppliers affected supported the deal.
The High Court has to approve the rescue plan before it can go ahead, and is open to any creditors whose rights are affected to challenge the scheme if they can show that they would fare better in a liquidation or receivership.