EY addresses $700m debt in wake of Project Everest failure
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Big Four accounting firm EY incurred over $700 million (around £555m) in additional debt on its global operating business due to the failed Project Everest, according to recently filed accounts at Companies House.
Project Everest, aimed at spinning off EY’s consulting arm, collapsed in April, incurring $600m (around £476m) in preparation costs. The company’s borrowing surged to $983m (around £780m) by 30 June 30 2023, compared to $269m (around £213m) a year earlier, addressing the financial fallout through an expanded credit facility.
EY justified the increased debt, stating it’s common for a global organisation of its size to maintain a modest financing facility for various purposes, including technology investments and managing cash flow. The Big Four firm said the financing facility, utilised for Project Everest costs, is expected to be almost entirely paid down by 1 July 2024, the Financial Times reports.
One $700m credit facility had decreased to $535m (around £424m) by November.
Following the Project Everest collapse, Julie Boland, US managing partner, expressed intentions to advocate for cost reductions at the global level.
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