The High Court has appointed an interim examiner to telecommunications company Smart Yuroe Broadband and related companies.
The court was told that while insolvent with liabilities of more than €100 million, the companies have a reasonable prospect of survival if certain conditions are met.
The petition by the companies’ directors was moved today just days after Citywest Ltd initiated proceedings for an order winding them up over a debt of some €80,521 due for rent, service charges, interest and insurance.
Counsel for the companies, which employ 57 people, said the alternative to examinership was liquidation and a firesale of the companies’ assets. Such a firesale would produce nothing for unsecured creditors and would not be a beneficial means of dealing with their assets, he said.
Appointing Mr John McStay as interim examiner, Mr Justice Kevin Feeney listed the petition for examinership to be heard together with the winding up petition on September 9th next.
Court protection is being sought by Smart Yuroe Broadband Ltd (SYBL), Smart Telecom Holdings Ltd and Broadband Communcations Ltd, all with registered offices at Citywest Business Campus, Dublin 24.
Smart Yuroe Broadband acquired the assets and liabilities of Smart Telecom as part of a rescue deal in 2006 and its principal backer is Kingspan cofounder, Brendan Murtagh, who was a 20 per cent shareholder in Smart Telecom.
Smart Yuroe Broadband took over the business for the nominal sum of €1 and also agreed to take over Smart Telecom’s debts, estimated at more than €10 million. After the sale of the business, secured finance of some €49.5 million was raised to pay certain creditors and provide working capital of the SYBL group’s operations.
Management accounts for the three companies up to December 31st last showed combined losses of some €74 million and the court was told the companies are struggling to fund group capital working requirements.
The companies said their difficulties were also due to the legacy of legal disputes, general inability to meet their business plan, historic uncertainty about local loop unbundling pricing, the slowdown in residential construction and the general economic slowdown.
