HMV in negotiation to take over five Zaavi music stores
HMV IS interested in taking over at least five of the closure-threatened Zaavi music stores in Ireland, formerly Virgin Megastore units, the High Court was told yesterday.
Mr Justice Bryan McMahon, who directed the appointment of a provisional liquidator to Zaavi Retail Ireland Ltd, heard that negotiations with HMV could yet result in the takeover of possibly more than the five Zaavi stores in Dublin and throughout Ireland.
James Doherty, counsel for Zaavi, said the company employed 207 permanent staff and 93 temporary staff and that talks could yet save many of the jobs.
He said Zaavi stores in England were already in administration. The appointment of a provisional liquidator could keep the Irish retail outlets ticking over on the sale of existing stocks long enough to facilitate the suggested takeover.
Mr Doherty said the board of Zaavi Retail had decided the company should be wound up and was seeking such a declaration from the High Court and the appointment of David Hughes of Ernst and Young as provisional liquidator.
Mr Doherty said the company had been unable to obtain supplies on credit since the closure of the Woolworth chain in Great Britain and was now demonstrably insolvent. The board felt that putting the company into examinership did not offer the prospect of survival and felt the best deal for creditors and employees, in the short term, could be achieved through liquidation.
HMV had expressed an interest in taking over five of Zaavi Retail’s stores in Ireland with a possibility of even more. The Irish operation had been a reasonably profitable one prior to the collapse of its main supplier.
Mr Doherty said any Zaavi vouchers bought since November 27th last could be redeemed for cash in any Zaavi Retail store in Ireland. The redemption of vouchers purchased prior to that date would be a problem because of the company’s insolvency.
Judge McMahon appointed Mr Hughes as provisional liquidator and the petition to wind up the company was adjourned until January 19th.