A “preferred bidder” has been approved by the examiner appointed to save troubled biscuit maker East Coast Bakehouse, the High Court has heard, and an investment agreement is expected to be in place by the end of the week.
Restructuring expert Kieran Wallace of Interpath was appointed by Judge Michael Quinn in January to act as examiner over the business, which was cofounded and run by former Enterprise Ireland chair Michael Carey.
On Tuesday, barrister John Lavelle, for Wallace, told the court that since the examiner’s last report to the court, two interested parties had progressed to “phase two” of the bidding process.
He said the second phase concluded on March 13th, and a “preferred bidder has been approved”.
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The finalisation of the investment agreement will allow Wallace to put in place a scheme of arrangement for the company to facilitate payments to its creditors, Lavelle said.
The biscuit company currently employs 78 people at a manufacturing facility in Drogheda, Co Louth and its operations have continued as normal during the examinership process.
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Quinn also granted an application under section 534 of the Companies Act by Mr Wallace’s barrister to extend the examinership period from 70 days to 100 days.
Lavelle told the court that “good progress” has been made since the last update to the court, but that Wallace is not yet able to put together the scheme of arrangement that would ensure the company’s survival after the protection period is ended.
He said Wallace is “hopeful” that he will be able to return to the court earlier, “if it is possible to do so”.
Barristers Stephen Brady, representing East Coast Bakehouse, and Arthur Cunningham, representing the Revenue Commissioners, did not object to the application for an extension of the protection period.
The jusdge granted the application, giving the examiner until April 23rd to present the scheme to the court.
The court previously heard that a phased payment arrangement had been reached with Revenue relating to tax debts of about €2 million.
The firm has faced financial cash pressure arising from high ingredient cost inflation, general increases in cost of doing business and phased repayment arrangements of tax liabilities, it said in a recent statement.
It is understood that the company suffered losses during its start-up period as it looked to develop large-scale manufacturing capabilities. During this period, it was hit by impacts from Brexit and the Covid-19 pandemic, which disrupted its growth at critical periods.
