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EY took longer than originally planned to settle debts it racked up due to the failed spin-off of its consulting arm, according to annual accounts filed by the Big Four firm.
A $700 million credit facility opened to cover the cost of Project Everest — which would have split the company in two and radically reshaped the global professional services industry — still had $270 million outstanding at the end of EY's fiscal year in June ( June).
Including other borrowings, interest paid by EY's global operating business over the year totaled $74 million, more than double the amount in the previous 12 months.
An accounts note, filed at Companies House in the UK, said the three-year facility was eventually repaid after the end of the financial year. The last payment was made in October, a person familiar with the matter said.
“Through our financial planning and regular assessments that guide our capital decisions, we made the decision to repay this credit facility 16 months early, rather than 20 months early,” the person said.
A year ago, E He said “The costs incurred during the Everest project will be paid almost in full by July 1, 2024.”
As with the rest of the Big Four, the company had more Slow year Than expected. Its revenue increased 3.9 percent globally, to $51.2 billion, with audit and tax offsets for a flat year in its consulting business.
Project Everest is designed to promote growth in both consulting and auditing, by freeing them from conflict-of-interest rules that prevent the cross-selling of consulting services to audit clients.
The ambitious plan collapsed in April 2023 after failing to gain approval from EY's US leadership.
Unlike a typical multinational corporation, EY is a network of nationally owned partnerships linked through a global entity that sets strategy and manages shared services such as information technology. The global operator, based in the United Kingdom, is run on a break-even basis and is funded through fees charged to national member companies.
About $600 million was spent on planning the Everest project before it was cancelled. The 2024 accounts show a significant reduction in spending on professional fees, such as lawyers' fees, which fell to $972 million from $1.4 billion in the year to June 2023.
Janet Troncal, the new global CEO, has promised something different Strategic approach To increase revenues, including new investments in units that advise clients on transformation and sustainability, and expanding EY's managed services business.
