Provisional liquidator named to Belgard Motors
A PROVISIONAL liquidator has been appointed by the High Court to the Tallaght-based Belgard Motors group.
Established in 1969, initially as a print business, the motor group was started in 1981 and became one of the biggest car dealerships in the Republic in terms of sales. It holds the franchise for Volkswagen, Audi, Mercedes, Mazda brands and was Ireland’s official Porsche dealer.
It employs 82 people, having laid off 37 earlier this year. The group is insolvent with debts of more than €17 million.
Mr Justice Peter Kelly said yesterday he was satisfied, given the admitted insolvency and the need to secure high value and movable stock, to appoint Tom Kavanagh as provisional liquidator to the group. Some suppliers had already entered on to the companies’ premises at Belgard Road, Tallaght, seeking to take back stock, he was told.
Rossa Fanning, for the group’s directors, said they had earlier considered seeking court protection but decided this would not be a viable option when it emerged earlier this month that there would be difficulty maintaining an important franchise, which was critical to securing investment.
The court heard the group’s projected turnover for this year was some €27 million, down 56 per cent from €62 million last year and €69 million in 2007.
New car sales in 2008 were 1,585 but were just 555 last August, while used car sales dropped from 1,203 in 2008 to 591 last August, the court heard.
John Damien Murphy, a director of the group, said in an affidavit the Irish motor industry has over the past two years been severely affected by the global economic crisis, Government changes to vehicle registration tax, a decrease in consumer spending in the recession and Irish consumers importing from Northern Ireland as a result of weakening sterling.
The industry also suffered from a writedown in the value of existing stocks and reduced financing for consumers with a resultant fall off in consumer demand.
Mr Fanning said the group was one of the largest car dealers in the Republic and the largest multi-franchise car dealership.
Mr Fanning also said one of the companies in the group provided parts and services for Porsche and other makes of cars.
While this had a viable future as a stand-alone basis, it was insolvent as a result of cross-guarantees between companies within the group.
Brian Murphy, a former director in the business who operated the motor group until November 2005, said he had recently been requested to create a survival plan. “I was prepared to invest working capital to refinance the business but we did not get the support of the VW Group.”
Paul Willis, managing director of VW Group Ireland said: “The industry is going through a very difficult time and this is just the latest example of that. However, we can be absolutely clear that we cannot be accused of creating the situation that Belgard got itself into.”
He declined to comment on Mr Murphy’s efforts to rescue the business.
Alan Nolan, director general for the Society of the Irish Motor Industry, said: “It’s terrible to see yet another household name fail this year. It underlines the depth of the problem in the industry. We’ve said that 10,000 jobs are hanging by a thread. The employees of Belgard this weekend sadly illustrate the perilous state of thousands of jobs.”
The Belgard group consists of five companies, a holding company JD Brian Ltd, trading as East Coast Print and Publicity, and five subsidiaries: JD Brian Motors trading as Belgard Motors; JD Brian Services Ltd; Autoplatz Ltd, trading as Porsche Centre, Dublin; and East Coast Car Parts Ltd.