THE HIGH COURT has appointed an interim examiner to water firm Celtic Pure that was at the centre of recent product recalls.
The Co Monaghan-based provider of bottled drinking water sought the protection of the court from its creditors due to the fall out from two investigations launched after naturally occurring arsenic in some of the firm’s batches exceeded regulatory limits.
This resulted in two precautionary product recalls and a partial closure order being made against the company by the HSE.
“The appointment of an interim examiner marks the end of a difficult time for the company,” Celtic Pure said in a statement.
“Since the product recall the company has worked closely with the HSE to ensure that the water supplied by Celtic Pure is completely safe and fully compliant with legislation,” the statement added.
The company, which petitioned the court for the appointment of an examiner, said the recall resulted in some adverse publicity for the firm.
Celtic Pure says it is now in full compliance with all health and safety requirements and its water is being sourced from other locations.
While the closure order has been lifted, and the source of the contamination has been dealt with, the company’s business has suffered.
The firms claims that its key retail customers have suspended orders, its monthly sales for August have dropped by 75% and it has incurred some €3 million in unforeseen once-off costs.
The company, which had been very successful until the recalls, now says that due to cash flow difficulties it is insolvent and needs protection from its creditors.
At the High Court on today, Mr Justice David Barniville said he was satisfied to appoint Mr Declan McDonald of PWC as interim examiner to the company, which employs 75 people.
The judge said that an independent expert’s report had stated that the company had a good prospect of survival if an examiner is appointed.
If the examiner can put together a scheme of arrangement with the firm’s creditors then the company has a good prospect of surviving as a going concern, the judge added.
The steps identified by the independent expert to ensure it can continue to trade include that Celtic Pure obtain fresh investment so it can restructure its debts and provide future working capital.
Other steps include obtaining the continued support of the firm’s bankers and suppliers, satisfying all the HSE and Food Safety Authority’s requirements and regaining customer confidence.
The judge adjourned the matter to a date in September.
With additional reporting from Dominic McGrath
To embed this post, copy the code below on your site
have your say