957 jobs were saved through examinership in 2017, according to the latest Baker Tilly Hughes Blake Examinership Index. 22 companies successfully emerged from the process.
These figures represent a marked increase in jobs saved in small and medium sized enterprises across Ireland – standing at 166 per cent of the 2016 figure, compared year-on-year. By using the examinership corporate rescue mechanism and preserving employment that was previously under threat, the state has saved over €3.8 million in respect of potential claims for arrears of wages, holiday pay, minimum notice and redundancy.
In the past twelve months, the examinership process has returned to national prominence, with a number of high profile companies utilising the legislation as a corporate recovery mechanism. The principal cases involved companies in all corners of Ireland including well known brands such as The G, The Eye Cinema, The Meyrick, The Golden Pages and The Regency (since rebranded as The Bonnington Hotel Dublin).
Dessie Morrow, Director of Corporate Recovery in Baker Tilly Hughes Blake, has commented that while it’s good news that 957 people are today employed who might otherwise not be, the increase in jobs saved in the SME sector signifies the difficulties still facing many companies arising principally from legacy debt issues.
“Many companies who consider examinership face significant barriers in accessing working capital which can lead to disgruntled creditors and an inability to pay short term debts as they fall due. This is in part exacerbated by the general improvement in the economy, increasing demand for goods or services and thereby stretching working capital requirements. The trends we’re seeing in the examinership process shows that SMEs are the most impacted from the legacy of the recession in Ireland.”
Mr Morrow advises companies that find themselves in a situation where they are struggling to pay debts to seek advice before the problem develops further, and further comments: “While there has been a general improvement in the broader economy, Brexit and political uncertainty in the main world economies continue to impact on Irish companies and we believe will result in an upturn in companies entering the examinership process in 2018. From a positive perspective, an appetite exists from lenders and investors to provide funding to firms who have restructured and are taking a responsible approach to getting their companies back to a stable position. In 2017 we have seen that the prospects of securing rescue funding have improved dramatically which is a positive step for the survival of companies entering the examinership process.”