Court approves USIT schemes

The High Court yesterday approved schemes of arrangement for two USIT companies, which have been under the court's protection for the past 70 days.

Under the schemes, a cash injection of €2.5 million is being made available to the companies - Usit Now and Usit World.com - under an agreement between an investor group and the examiner, Mr David Hughes of Ernst & Young, together with additional bank finance facilities and trade finance.

A statement issued on behalf of the companies said that Ion Equity, a Dublin finance house representing the consortium of investors, had also confirmed that additional strategic management had been agreed for the company. During the four-month period of the examinership, the statement added that all 14 offices in the Republic had traded well and the intention of the consortium was that the additional appointments would augment the senior management team.

Mr Neil O'Leary, chief executive of Ion Equity, said satisfactory agreements had been reached with all of the major stakeholders, including the students, the banks and USIT's major suppliers.

Under the proposed schemes, creditors of USIT Ireland Ltd, trading as Usit Now, will get 15 cent per euro while creditors of Usit World.com will receive 3.5 cent per euro. An earlier hearing was told the scheme for Usit Ireland had the overwhelming support of creditors, who were owed more than €23 million.

The court heard an €18 million investment in Usit World.com and its IT system has effectively been written off.

Mr Hughes said he was delighted to see the company come successfully out of examinership and that, restructured, it could prosper.

The consortium is made up of Ion Equity and two as-yet-unnamed individuals understood to be primarily involved in the property market. Usit Now employs about 300 people.