Courts (Guyana) Inc will not be affected by its UK parent's severe financial problems, says Managing Director, David Burgess.
The British furniture retailer with some 92 stores in the Caribbean said on Monday it was seeking administrators to oversee its business after its lenders declined to bail out the ailing firm.
Burgess, calling from a company roadshow in Linden on Wednesday, said the Caribbean division was profitable, unlike the UK operations with 89 stores, and was in the process of forming a separate holding company. Burgess said at the moment there were eleven directors working together under regional director Nigel Blake.
Courts Trinidad managing director Thomas Pantin had told the media there that this plan is on hold for the moment.
The company would have been cross-listed in Trinidad, Barbados and Jamaica. There were also plans for an initial public offering by June which would make the Caribbean operations more independent.
"That will now fall into the hands of the administrator," Pantin told the Trinidad Guardian. "It will remain an option available to him."
Burgess said purchases for the Caribbean would not be affected in the run-up to Christmas as the company's international purchasing unit was still operating.
Meanwhile Burgess said Courts Guyana did have loans outstanding to four financial institutions and there had been discussions since the news of the receivership. But he stressed that the creditors remained happy and "they have our balance sheet."
He also said the UK administrator had assured the Caribbean division that lines of credit would continue.
He said the local division was paying all its bills on time and remained a profitable venture with 65% of the market. Of some 75,000 customers, 86% paid on time.
Burgess said this was in line with Trinidad where good payers were 90%. "The rest we have to chase," he said and estimated loan write-offs at 5%.
A Courts Guyana press release noted the situation in the UK and quoted Blake as saying that in contrast results in the Caribbean are extremely encouraging - profit before tax is 32.5% up on last year."
Reuters reported Courts PLC had said earlier on Monday its lenders would not waive conditions of minimum levels of financial performance attached to the firm's loans, estimated at US$532M, and would not stump up any extra cash.
It said it had applied to have its shares suspended from the London Stock Exchange pending clarification of its financial position.
The stock crashed earlier this month when Courts forecast a bigger-than-expected year loss and said it was in talks with its lenders.
Courts has suffered this year from the devastation of its Caribbean businesses by Hurricane Ivan, and a costly restructuring programme.