An interim examiner has been appointed by the High Court to a Co Louth based company that makes magnesium-based products for a variety of industries including steel, chemical and glass making.
Premier Periclase Ltd, which employs 94 people, sought the protection of the courts due to difficulties caused by the rise of gas and energy prices, which have doubled between 2020 and 2021.
The court heard the company, owes Bord Gais €2.5 million and electricity supplier Energia €900,000.
The company, which requires a large amount of gas, says that Bord Gais has threatened to cut off its supply in a matter of weeks unless the company makes a substantial payment, which it says it is unable to make.
World leader
The company, which is a specialist and world leader in making magnesium oxide and magnesium hydroxide products which are used in the manufacture of heat-resistant lining for furnaces, with a registered address at Boyne Road, Drogheda, Co Louth has been operating on the site since 1977.
Its products are sold in Ireland, Europe, India, Africa and the UK. The company's Munich-based owner Callista Turnaround 10 GmbH acquired the business last February.
On Thursday afternoon Mr Justice Brian O'Moore said he was satisfied to appoint insolvency practioner Neil Hughes of Baker Tily as interim examiner to the company.
The judge noted that while the company has financial difficulties an Independent Accountants report by Mr Cormac Mohan of Fitzwilliam Corporate Insolvency stated the company has a reasonable prospect of survival if certain steps are taken.
These include the appointment of an examiner who would negotiate with and help formulate an agreement with the company's creditors, which if approved by the High Court would allow it to continue as a going concern.
The firm also needs refinancing, Mr Mohan stated in his report.
Insolvent
The company, represented by Ross Gorman Bl said that as things stand the company was either currently insolvent or about to become insolvent on a cash flow basis.
It had been successful for many years but the rise in gas and electricity prices caused by factors including tensions on the Ukraine-Russian border and the fallout from the Covid19 pandemic has damaged its business.
Counsel said that as things stand it is unable to trade its way out of its difficulties and needs to restructure its business and its debts.
Counsel said Bord Gais had sought a €2m letter of credit from it which it is not able to provide. The Bord said it would cease supply it with gas in the next two weeks unless it receives a substantial payment.
The company said that it cannot make this payment without jeopardising its future vitality.
Counsel said the situation was now critical, and it urgently needed the appointment of an examiner to assist it with its dealings with creditors including Bord Gais.
Counsel said the interim examiner's expertise was required to help the company in what will be a tough and complicated series of negotiations including with three trade unions which represent the company's employees.
After appointing Mr Hughes as interim examiner the judge adjourned the matter to a date in early January.
