Pierse gets protection from creditors as debts rise

Grant Prior 12 years ago

The Pierse Group in Ireland is being protected from its creditors by the courts less than 18 months after its UK operations went into liquidation.

Pierse Contracting in the UK was put into liquidation in June 2009 following a string of claims by trade contractors that it was not paying bills.

Now Irish parent the Pierse Group has received court protection from its creditors following a collapse in cashflow caused by outstanding bills owed by clients.

The High Court has appointed an interim examiner to Pierse Contracting and Pierse Building Services, the two businesses within the group.

The company said its contracting business was trading profitably but it was owed more than €30m for work that it had completed, of which more than €20m had been “severely delayed”, causing “serious cashflow problems”.

In a statement to the Irish Times, the group’s directors welcomed the appointment of John McStay of McStay Luby as an examiner to the business.

Under the examinership process McStay will seek new investment for the group and implement a restructuring plan to keep the viable part of its business in operation.

Pierse chief executive Nobby O’Reilly said he believed the company had a strong chance of survival and was working on contracts with a value of €151.5m.

Rossa Fanning, counsel for the Pierse Group, said this debt had created an intolerable cashflow difficulty, adding that if it was not for this debt the company would not be before the High Court.

Pierse requires new funds to support working capital needs and the continued co-operation of key suppliers and contractors.

If the firms were wound up, their liabilities would be about €310 million, counsel said.

The firms employed 700 people at their peak, but that number has since been reduced to 211. The group has also cut its overheads from €19m to €5m.

Fanning said the firms had turnover of more than €300m during the building boom but expected to have turnover of just €100m in the year ending April 2011.

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