Ladbrokes has effectively filed for bankruptcy protection for its Irish retail business as it looks to restructure the struggling division in order to keep it afloat, confirming that redundancies are inevitable.
An examiner, the Irish equivalent of an administrator, will be tasked with reshaping the subsidiary, which the company says is “currently held back by real estate legacy issues.” The business has seen profits decline over several years, posting a loss after interest and tax of more than €5m in the company’s full-year results for 2014.
The process is likely to see redundancies made at all levels of the business, with the number dependent on the restructuring of the operator’s retail estate of 196 shops across the Republic of Ireland. Ladbrokes currently employs 840 people in the country.
The directors of the operator’s Irish trading subsidiaries Ladbroke (Ireland) Limited, Ladbroke Leisure (Ireland) Ltd and Dara Properties Ltd have successfully applied to the High Court in Dublin to appoint an interim examiner and for protection of the court while it goes through the examinership process.
Under Irish law the examinership process allows the examiner to negotiate a Scheme of Arrangement with a company’s creditors to allow the company to continue trading as a sustainable business. It is estimated that the process will take a total of 100 days to complete.
“The action taken today by the directors of the Irish companies is to safeguard the Irish business which in its current state is not sustainable and cannot be supported by the Ladbrokes board without radical change, having lost its competitive edge,” the operator’s chief executive Jim Mullen explained.
"This step has been taken in the best long term interests of Ladbrokes Ireland, its employees, customers, partners and shareholders. In entering the process, our aim is to build a sustainable and competitive business based in Ireland, run from Ireland, investing in Ireland and supporting the Irish economy and sporting industry while delivering for shareholders.”