By Guy Taylor
EY has taken on $700m (£554.27m) in additional debts in its global operating business, which were largely spent on its failed plans to split the business.
The plan, known as Project Everest, involved breaking up EY’s audit and consulting divisions and would have constituted the biggest-shake up in the accountancy sector in over twenty years.
But the proposals, which came after calls for industry reform over conflicts of interest and poor working practices, collapsed in April.
The debt figures, revealed in accounts filed with Companies House and first reported by the Financial Times, shed light on the huge costs of the scrapped spin-off.
Around $600m was spent prepping Project Everest. EY’s borrowing soared to $983m last June, an increase from $269m the prior year, as it enlarged its existing floating rate credit facility and brought in a second.
EY employs over 365,000 people across 150 countries.
The Big Four giant’s national member firms sent around $6.4bn in fees to the global operating company in 2023, up from a prior year’s $5.3bn.
In a statement, EY said: “It is common for a $50bn global organisation such as EY to maintain a modest financing facility on our balance sheet.
“The financing facility has been utilized to support previous investments in new technology, managing cash flow and growing specific practices. The debt facility is being managed in line with our agreed financial position. The accounts for EYGS are signed off by our external auditor.”
“As already communicated to our partners the costs incurred during Project Everest will be almost entirely paid down by July 1, 2024. There is no change to this position.”
