Bus Éireann refuses to rule out appointing receiver if strike continues

Stephen Kent says the board must take "whatever necessary measures"

Bus Éireann refuses to rule out appointing receiver if strike continues

SIPTU trade union placards at Bus Áras as part of industrial action | Image: RollingNews.ie

The chief commercial officer at Bus Éireann has not ruled out appointing a receiver to the semi-state company, if strike action continues.

Drivers around the country are mounting pickets as an all out strike is underway.

The company says the action will worsen its deteriorating financial situation, and that it is facing imminent insolvency.

However, unions have refused to agree to proposed changes.

The company says it lost €9.4m in 2016, with its losses 'accelerating' in the last two months.

While it says its overtime bill is currently costing some €13m.

Stephen Kent is chief commercial officer at Bus Éireann. He told Newstalk Breakfast the options for the company are limited.

"It's very disappointing from our perspective unfortunately that it's got to this.

"But to a large extent it's kind of unavoidable given the grave financial situation that we face at the minute.

"We can't avoid the fact that our labour costs (are) 40% of our total cost base.

"Within that we have - for instance, if you take a driver grade - they're earning on average about €48,000 and it's made up of lots of things - basic pay.

"And remember a huge part of this agreement from our perspective is we're not touching basic pay.

"And we're not encroaching on any of the previous agreements - but what we have to do is we have to be able to address work practice, and there is a number of work practice changes that have built up over a number of years.

"For instance, our overtime bill in this business is about €13m".

On the next move open to the company, Mr Kent said: "Clearly we can't continue as we are and the board have a fiduciary duty, particularly to make sure they look after the very best interests of the company and ensure that the business can remain solvent in the long term."

Asked if that meant the company may appoint a receiver if the loses mount, Mr Kent did not rule it out saying: "The directors...have a duty to make sure the best interests of the company is served - and they will have to take whatever necessary measures are required to ensure that the business remains viable".

A receiver is appointed by the court to restructure the company.

While a company under receivership may not shut down completely, the receiver has the legal ability to sell of assets to repay amounts due.

They can also renegotiate contracts.

The receiver, usually an accountant, takes administrative control of the company with the goal of recovering the money owed in line with the original loan agreement made between the company and the bank.

It is a procedure seen as a last resort.