The High Court has appointed a provisional liquidator to an electrical contracting company that has more than 50 people working for it on various projects.
The order was made in respect of NSR Engineering Ltd, whose financial difficulties have been largely caused by the impact of the Covid-19 pandemic on the sector, and significant increases in the costs of obtaining materials.
Ms Justice Carmel Stewart appointed insolvency practitioner John Healy of Kirby Healy as provisional liquidator to the company, with a registered address at Kinsealy Business Park in Co Dublin, after being satisfied that the firm was insolvent and unable to pay its debts.
The judge was also satisfied that it was in the best interests of all the relevant parties, including its creditors, that Mr Healy be appointed as provisional liquidator.
The company, represented in court on Thursday by Brian Walker BL instructed by solicitor Tom Casey, says that it was insolvent to the tune of about €800,000.
Mr Walker said that while the company has valuable contracts worth some €15.6 million, it has been experiencing cash flow difficulties.
Counsel said that since early 2020 the Covid-19 pandemic has had an “extreme effect on the company”. Its workers and subcontractors were not able to complete works due to the lengthy lockdown.
In addition, costs for materials such as copper and steel products have increased by between 20 and 30 per cent, counsel added. This increase in costs could not be passed on to clients regarding projects it had tendered for.
It also had to walk away from other projects that were no longer viable, counsel said.
Counsel added that the company owes Revenue €1.1 million, which it does not have the capacity to pay.
It was also unable to service its debts to its creditors, and its suppliers had been seeking cash on delivery for goods. Trade creditors are owed some €650,000, counsel added.
The company also experienced difficulties in getting paid for works it had carried out, Mr Walker added.
Counsel said that the company has 50 to 60 employees and subcontractors working for it on several projects. The appointment of a liquidator was the best way to protect those workers and ensure an orderly wind-up of the company, counsel said.
The court was told the company had considered all the options available to it, but unfortunately the situation was such that its board of directors had no option other than to put the firm into liquidation.
Counsel said the company attempted to secure additional funding from lenders. It was unable to get extra credit due to the loss it sustained in 2020.
The judge, after confirming Mr Healy’s appointment, adjourned the hearing of the full petition to wind up the company to a date in October.