The High Court has appointed an interim examiner to the Bradley Pharmacy Group, which has debts of approximately €24 million.
The group which employs 139 people operates a number of pharmacies in counties Louth, Meath, Monaghan, Dublin, Wicklow and Kerry.
It says its current difficulties are due to factors including a historical debt owed to Bank of Ireland and a decision by its former main supplier United Drug to change its credit terms from payment from 120 days of delivery to 90 days of delivery had a negative impact on the group's cashflow.
At the High Court on Friday Ms Justice Aileen Donnelly said she was satisfied to appoint insolvency practitioner Mr Ken Tyrell of PricewaterhouseCoopers as the interim examiner to a group of related companies which form the Bradley Pharmacy Group.
The Judge noted that the while the companies are insolvent and unable to pay their debts as they fall due, an independent expert’s report furnished to the court stated that the group has a reasonable prospect of survival if certain steps are taken.
The steps include restructuring the groups banking debts, securing fresh investment and the examiner securing approval for a scheme of arrangement with the group’s creditors.
The application for an examiner was made by one of the companies in the group Pagni Pharmacies Ltd.
Lyndon MacCann SC for Pagni said the application for the protection of the courts was being sought in order to allow the examiner to engage with potential investors and put together a scheme that if approved by the High Court would ensure the group’s survival as a going concern.
The examiner would also help provide reassurance to the people employed in the group’s various outlets.
Potential investor
There has been at least one expression of interest form a potential investor, counsel added.
Counsel said that in the event of a successful examinership the group would have an excess of liabilities over assets of €9.1 million. If the group went into liquidation, the deficit increases to €21.4 million.
Counsel said that while the companies in the group were trading profitably and can service their current debts the group was unable to meet repayments owed to Bank of Ireland in regards a historic debt of €19 million.
Counsel said the group’s banking debts would need to be restructured, and the group has been working closely with Bank of Ireland.
Further difficulties were due to the challenging retail environment the group finds itself in, and the change of United Drug’s payment terms, with the supplier owed some €3 million by the companies in the group.
The Judge after appointing Mr Tyrell as interim examiner adjourned the matter to August 20th.
