STA Travel, the Swiss-owned youth travel company, has been replaced as the likely new owner of USIT, the Irish student travel company in examinership. But the fate of a deal now rests on talks between the potential investor and a key USIT supplier, which must be completed by Tuesday.
In recent weeks, the examiner Mr David Hughes, appointed by the High Court at the request of the USIT holding firm, which is 82 per cent owned by STA, began talks with another as yet unidentified potential investor regarding two of the USIT companies. Mr Gordon Colleary, founder and former chief executive of the group, said last night that he was not involved in any bid for the company. If successful, the shares in the firms will be transferred from the holding firm. More than 300 jobs are at stake in the talks.
Talks between Mr Hughes and STA about the USIT holding company did not lead to an agreement.
In the past two days, Mr Hughes, of Ernst & Young, has made formal proposals to creditors of USIT subsidiaries, USIT Ireland Ltd and USIT World.Com, for a scheme involving a new "investor group". He told The Irish Times last night he could not identify the group. The group has not yet reached agreement with one supplier about future trading. The investors have made such an agreement a core condition, without which they will not go ahead with the scheme.
Mr Hughes would not identify the supplier concerned nor would he say how much the supplier was owed, except to say "there are substantial amounts of money involved".
He reports to the courts on Tuesday. Mr Hughes said his responsibilities as examiner were to the companies and not to STA.
On Tuesday, the Tánaiste, Ms Harney, approved the takeover of USIT World plc, the USIT holding company, by STA. STA bought 82 per cent of the holding company for €1 before its collapse in February. The remainder of the company is owned by staff. The approval of the takeover was, however, "academic" by the time it was announced.
If the scheme involving the new investor is put in place, the shares in the two firms concerned will be transferred from the USIT holding company to the new investors.
Mr Hughes expects an agreement will be reached between the supplier and the investor group. "If it is not forthcoming, that could jeopardise both \ companies." Between 300 and 350 jobs are involved. The examiner said he believed both firms could have a future.
There are 12 classes of creditors in the two companies. For the larger Usit (Ireland) Ltd a consensus of creditors favourably disposed to the scheme was reached. With USIT World.Com, which employs fewer than 20 people, the creditors were not satisfied with the current scheme.
Both firms in which the unidentified investor group are interested are the part of USIT which operates in the Republic. USIT Ireland's offices are on Aston Quay, Dublin. USIT World.Com provides technology back-up to the group. Earlier this week Mr Hughes told the court he did not think the USIT parent could be saved. Another USIT subsidiary, USIT Ltd, registered in Northern Ireland, was put into liquidation by National Irish Bank on foot of debts of €3.38 million. In February the High Court was told that, save for some €15 million loaned to other firms in the group which was irrecoverable, USIT Ireland would be solvent.
If Mr Hughes can tell the court on Tuesday that a deal has been reached with the investor group, a full hearing is likely to be scheduled soon afterwards.
