Consultant says move will save it €5m
Consultant WYG plans to liquidate its Irish business, in a move it says will save the company €5m.
The company – which built up its Irish business through a series of 12 acquisitions between 1999 and 2008 – is in the process of signing up administrator Grant Thornton as liquidator for the division.
WYG said in a statement to the stock exchange this morning: “[Our Irish business] has experienced extremely challenging trading conditions in recent years as a result of the wider economic conditions in Ireland and the severe decline in the Irish construction market.
“A very significant factor leading to the trading underperformance of the Irish business has been the unsustainable property costs and the legacy of claims associated with [our] acquisitions [in Ireland].
“The directors of WYG estimate that the future legacy costs, primarily property-related, of supporting the Irish Business would have been €5 million and these sums will now be redirected towards underpinning the growth initiatives for the wider WYG business set out in the Group’s annual report published on 4 July 2012.
“The Irish business’ subsidiaries in Northern Ireland continue to trade profitably and are unaffected by the property issues that have impacted the Irish Business.
“WYG has submitted an offer to the provisional liquidators, Paul McCann and Stephen Tennant of Grant Thornton, for the Northern Irish business.
“There can, however, be no certainty that this offer will be accepted, as the provisional liquidators will be seeking further expressions of interest in the Northern Irish business over the next few days. In the meantime, this business will continue to trade normally.”
Paul Hamer, chief executive of WYG, said: “We greatly regret the impact that this decision will have on all those associated with the Irish business.
“However, despite the very best efforts of its management team, it has become clear that the scale and nature of the legacy issues it faces are ultimately insurmountable.
“This move is the only responsible course of action for WYG’s board to take.”