Court approves survival plan for Xtra-vision chain

THE HIGH Court has approved a survival scheme for the Xtra-vision chain of stores.

The company, which operates more than 160 DVD and video game rental shops employing more than 1,200 people across Ireland, was granted court protection from creditors last April after it said it was insolvent and unable to pay its debts as they fell due because of cash flow difficulties.

Mr Justice Brian McGovern yesterday approved a survival scheme proposed by the examiner to the company, David Hughes, who said the scheme was in the best interests of creditors, employees and all concerned with the company.

The judge’s approval will allow the company to exit examinership on August 4th and continue to trade as a going concern.

The court gave its approval after being told the scheme had secured approval of most classes of creditors, including the Revenue Commissioners.

Under the scheme, Birchall Investments, which bought the chain from US firm Blockbuster in 2009, will invest another €8 million in the company.

The company has also entered into agreements on leases with landlords, which will reduce overheads.

Various classes of the company’s creditors will receive between 8 per cent and 90 per cent of what they are owed.

Seventeen loss-making stores have been closed. While most of the workforce was retained, there were 90 redundancies, 45 of which were voluntary.

The court was previously told Xtra-vision’s difficulties were caused by factors including falling revenues, the withdrawal of coverage by two providers of trade credit insurance to Xtra-vision’s suppliers and poor trading figures caused by the bad weather over Christmas and the new year.

High rents were also cited as problematic.

The company was incorporated in 1980 as a video rental outlet and diversified its services in recent years to sell and rent DVDs, Blu- Ray movies, video games, hardware and confectionery.

In a statement, Xtra-vision thanked its past and current employees, customers and suppliers for their support during the examinership process.