WORKERS at the Xtra-vision in Dundalk are breathing a sigh of relief after the High Court approved a survival scheme for the Xtra-vision chain of stores.
The company, which operates a DVD rental store at Adelphi Court in Dundalk will emerge from examinership on August 4 next and will continue to trade as a going concern.
The Dundalk store is one of Xtra-vision’s more than 160 stores across Ireland. It employs over 1,200 people and, was granted court protection from creditors last April.
The move came after Xtra-vision said it was insolvent and unable to pay its debts as they fell due owing to cash-flow difficulties.
Mr Justice Brian McGovern approved the company’s survival scheme on Friday, July 29 after being told by examiner to the company David Hughes, of accountancy firm Ernst and Young, that the proposal was “in the best interests of the creditors, the employees and all concerned with the company”.
The decision will enable the movie rental firm to emerge from examinership on August 4 next and it will continue to trade as a going concern.
The court heard that the scheme has the approval of most classes and individual creditors, including the Revenue Commissioners.
Under the terms of the scheme Birchall Investments, which bought the chain from US firm Blockbuster in 2009, will invest another e8 million in the company.
The scheme has also seen the closure of 17 loss-making stores, and 91 redundancies, 45 of which were voluntary. However, the majority of the 1,200-strong workforce has been retained.
The firm’s overheads are also set to reduce following successful lease negotiations with landlords. Meanwhile, the company’s creditors will receive between 90 per cent and 8 per cent of what they are owed.
Xtra-vision’s difficulties were caused by various factors including falling revenues, which were compounded by the bad weather over Christmas and New Year period.