Company at centre of bottled water recall ‘now insolvent’
Posted on 29th August 2019 at 21:52
Celtic Pure claims August sales slump and €3 million in unforeseen once-off costs incurred
The High Court has appointed an interim examiner to Celtic Pure, the company which was at the centre of recent recalls of bottled drinking water.
The Co Monaghan-based company sought the protection of the court from its creditors due to the fallout from two investigations launched after naturally-occurring arsenic in some of the company’s batches exceeded regulatory limits.
This resulted in two precautionary product recalls, and a partial closure order being made against the company by the Health Service Executive.
The company, which petitioned the court for the appointment of an examiner said the recall resulted in some adverse publicity.
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.
Celtic Pure claims that its key retail customers have suspended orders, its monthly sales for August have dropped by 75 per cent 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 Thursday Mr Justice David Barniville said he was satisfied to appoint 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 was appointed.
If the examiner could put together a scheme of arrangement with the company’s creditors then it had 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 its 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.
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