Dunnes Stores has agreed to pay €21.6 million to Kilkenny property company to reduce its debt level and avoid a closure.

Kilkenny is backed by the National Asset Management Agency and Property developer Holtglen decided to withdrew its application to wind up the Dunnes Stores after the company agreed to pay its outstanding debt.

The development brings an end to between country's biggest companies as Holtglen is backed by NAMA. The winding up order would not have closed down the stores but would have threatened the parent company running the stores.

The debt was owned for Holtglen's development of a shopping centre in Kilkenny, the commercial court observed. NAMA had authorised Holtglen to bring the petition after Dunnes failed to pay its debt despite an arbitration award against the company. NAMA has been backing the claim as it is likely to receive the cash recovered by Holtglen, which is insolvent.

Holtglen also said that it was forced into insolvency because of non-payment of debt by Dunnes, which had said that it has not paid the debt due to several reasons like concerns about the viability of the centre at Ferrybank.

Holtglen barrister Maurice Collins yesterday moved with withdraw the petition as Dunnes had paid the money owed on Thursday evening.