Irish Car Rentals posts loss of €13m for 2008

IRISH CAR Rentals, the car-rental company which emerged successfully from examinership in May after being bought by the owners of the Thrifty car franchise, has posted a loss of just under €13 million for the 53-week period ended November 2nd, 2008.

The €12.9 million pre-tax loss revealed in the recently filed accounts compares to a pre-tax loss of just over €4,000 for 2007. It gives an insight into the financial decline of the business in the years preceding the examinership process. Turnover increased in the same year, from €13.2 million in 2007 to €15.5 million in 2008.

The €12.9 million loss posted for 2008 includes a figure of €5.8 million relating to provisions against the carrying value of investments in subsidiary companies, intergroup balances and intangible assets that were identified during the examinership process.

Last May, the High Court ordered that a report into the running of Irish Car Rentals – which has subsequently been taken over by new owners – be sent to the Office of the Director of Corporate Enforcement. The accounts state that the Independent Accountants Report to the High Court presented during the examinership process found that there were very significant financial irregularities in the company’s internal accounts.

During the examinership process the court heard that the company had about €40 million in liabilities and €30 million in assets.

The group had a complex structure and the security for its debts included cross guarantees from different member companies.

Its two directors, John Culleton and Rosemary Fogarty, have since resigned and the company is now run by Colm Menton and Eugene O’Reilly, who run Thrifty.

As part of the examinership process, monies owed to creditors were written down by €11.3 million. Unsecured creditors received 7.5 cents in the euro, preferential creditors were to receive 50 per cent of what they were owed, while secured creditors were entitled to recover all money owed.

The new owners also agreed to invest €1.29 million in the business. The 2008 accounts, which they signed off last week, state that the directors are confident the company’s profitability will be restored.