Consultant WYG has closed its loss-making Irish business and appointed Grant Thornton as liquidator.
The company blamed “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. Chief executive Paul Hamer said he “greatly regrets” the impact the decision will have on employees of the Irish business but said that it had become clear that the “scale and nature” of the legacy issues it faces were “ultimately insurmountable”.
“This move is the only responsible course of action for WYG’s board to take,” he said. Hamer said it would have cost £4M to keep the business afloat.
WYG’s Irish business was built up through a series of 12 acquisitions between 1999 and 2008, with the biggest deal the purchase of the 184-strong Irish consultant P H McCarthy for £15M in October 2007. Following that deal WYG employed over 670 staff in Ireland across offices in Athlone, Belfast, Cork, Derry, Dublin, Kilkenny, Limerick, Sligo and Waterford.
But the expansion into Ireland coincided with the massive collapse of the Irish property market and was a significant factor in WYG’s debt problems that led to a wholesale restructuring of the company in 2010. The Irish business had already contracted as a result and it is understood that around 50 jobs will be lost.
The Irish business’s subsidiaries in Northern Ireland continue to trade profitably and WYG is seeking to retain these businesses. It has submitted an offer to the liquidator, but said there can be no certainty that this offer will be accepted as the liquidator will be seeking further expressions of interest over the next few days. In the meantime, this business will continue to trade normally.