Shareholders in Irish books retailer Eason are set to share in a €20 million payout by the end of this year from the proceeds of the sale of a number of properties since late 2018.
In a letter sent to its 230 shareholders earlier this week, Eason chairman David Dilger outlined plans for a voluntary liquidation of Eason Holdings PLC (EHPLC), the entity that holds its property assets. This move is designed to allow for a distribution of the cash to shareholders in a tax efficient manner.
This will equate to €1 a share, with Eason planning to hold an extraordinary general meeting next month to secure approval for the scheme. David O'Connor of BDO has been lined up to act as liquidator to EHPLC, with 75 per cent support from shareholders required for the resolution to pass.
Because of Covid-restrictions, the meeting will be held by telephone or via video link.
Shareholders had originally expected to share in a €60 million distribution but the sale of three properties - including its flagship store on O’Connell Street in Dublin - has been delayed by the impact of the Covid-19 pandemic on the economy.
"We continue to hold O'Connell Street, Blanchardstown and Athlone and, given the current market conditions, it is difficult to see how we can successfully dispose of these three properties, for full value, in either 2020 or 2021," Mr Dilger told shareholders.
The three properties have been moved into a new EHPLC subsidiary company called Burwal Trident Limited (BTL), which will hold the assets. Mr Dilger said this would allow the company to continue the "property disposal process unhindered" in due course.
The property disposals were part of a wider restructuring of the Eason group initiated in 2018. This involved the retail and property arms of the company being placed into separate legal entities in March 2019.
Under the plan, all of the company owned properties were to be sold, with the retailer leasing them from the new owners. Some €19.4 million of the proceeds has already been used to provide additional capital to the retail arm, now trading as Eason Retail PLC.
Eason was forced to close its stores earlier this year after the Government locked down the economy to curb the spread of the coronavirus.
The retailer subsequently decided that its seven loss making shops in Northern Ireland would not reopen following the easing of restrictions there, impacting 144 staff.
In addition, Eason reduced its headcount in the Republic by 150 in response to the impact of the lockdown on its bricks and mortar business. This included 100 redundancies of staff with fewer than two years of service.
It is expected that this will achieve annual savings of €2 million for the retailer, which had to shutter its 36 shops from March 24th to June 8th.
Eason recently secured permission from the Competition and Consumer Protection Commission to acquire Dubray Books, a rival Irish bookseller.