The new external investor in garden centre and outdoor furniture retailer Rathwood has said it is committed to supporting the long-term recovery and future growth of the company.
Last Friday, the High Court confirmed a restructuring plan – known as a scheme of arrangement – that will see a €750,000 investment by Evergreen Home and Garden Holdings that allows Rathwood to exit examinership.
The company – which employs around 100 people near Tullow on the Carlow-Wicklow border – entered examinership in April, and said at the time that refunds owed to customers who placed orders that were never delivered could not be processed.
The new investment ends the examinership process, returning the business to normal trading outside the protection of the court.
Evergreen Home and Garden Holdings is an Irish-incorporated investment vehicle established specifically for the purpose of the investment and the long-term development of Rathwood.
It is privately funded by a small group of Irish investors led by Cork-based corporate finance advisor Kevin Nolan of KJ Nolan Ltd.
In his report to the High Court, examiner Padraic Bermingham of Strata Financial recorded that Evergreen has “significant experience in corporate finance, acquisitions, financing and restructuring transactions”.
Mr Bermingham concluded that the proposed scheme of arrangement offers a materially better outcome for creditors than liquidation, while also the continuation of the company’s business and the retention of employment.
However, in June Mr Bermingham warned 7,000 customers – who were owed money by the company – that they were likely to receive only a “small” amount of what they are owed.
Separately, at that time the Competition and Consumer Protection Commission advised people affected to “take action immediately” and “request a chargeback from their bank or card provider if they have not already done so”.
A chargeback is a process where a customer asks a bank or credit card company to reverse a transaction.
The CCPC also told consumers to register a claim against Rathwood.
Under the scheme of arrangement for Rathwood, Evergreen has invested €750,000 by way of a subscription for new shares in the company together with a long-term loan facility, which is non-interest bearing and not repayable on demand, alongside further working capital support for the restructured business.
The investment funds, which were held in escrow throughout the examinership, have been released to the company on completion of the scheme.
Chief Executive of Evergreen Home and Garden Holdings Mr Nolan said Rathwood is a “unique Irish business with an exceptional brand, loyal customers, dedicated employees and enormous long-term potential.
“We are investing because we believe Rathwood remains a fundamentally strong business with a future, and we are committed to working with management, employees, suppliers and all stakeholders to secure that future.
“Our approach for the business runs in three phases. Stabilisation over the first twelve to 18 months to ensure supplier confidence is rebuilt on normal commercial terms. Growth follows from year two to include the development of the online platforms in addition to continued investment in the Rathwood site itself in relation to the restaurant, retail floor and events programme.
“Consolidation then positions Rathwood as a platform for growth in an Irish garden centre sector still dominated by single-site independents,” Mr Nolan added.
The investment is being underpinned by the establishment of a reconstituted board of directors at Rathwood, meaning there is an entirely new management team in place.
