Tuesday, July 21, 2009
JOHN FLEMING, the struggling west Cork property developer, has total debts of more than €1 billion. The extent of Mr Fleming’s borrowings emerged yesterday when he sought protection from some of his creditors in the High Court.
The court granted protection to Tivway, a company within Mr Fleming’s property development group, following an attempt by the Dutch-owned ACCBank to take control of the firm over unpaid loans of €21.5 million.
Tivway, which is behind the high-profile Rockbrook residential and retail development in Sandyford, Co Dublin, now has 100 days to come up with a rescue plan or else be wound up. Mr Fleming paid €245 million for the 11.3 acre Rockbrook site in Sandyford.
The court heard yesterday that the office block, due to be developed by Tivway in the complex, would be worth less than €10 million if completed. The cost of building the tower, which was to have been financed by ACC, was put at €20 million.
ACC withdrew from the project in March and demanded repayment. The court was told that ACC’s loans represented less than 2 per cent of the group’s total debts, indicating total debts of more than €1 billion.
Anglo Irish Bank is owed €268 million as “a contingent creditor” of Fleming, the court heard.
The State-owned bank supported the appointment of an examiner to the company, subject to the survival plan devised by the examiner, George Maloney of Dublin firm Baker Tilly Ryan Glennon.
The examinership was described in court as “the least unpalatable option” by the bank’s counsel, Cian Ferriter. It gives the company protection from its creditors.
Mr Fleming is one of the most prolific developers in Munster. He built and owns a number of hotels including the lodge and spa at Inchydoney in west Cork, the Radisson Hotel in Limerick and the Sheraton hotel and golf resort at Fota Island in Cork.
His construction group has built projects in the industrial, energy and pharmaceutical sectors.
The court was told yesterday that the group’s 650 employees were at risk if ACC successfully appointed a receiver to take control of Tivway as it would have a knock-on effect given the “inter-dependency” between companies within the Fleming group.
Lyndon McCann, Tivway’s legal representative, told Mr Justice Brian McGovern that if the company folded, Anglo Irish would have “no alternative but to engage in the unpalatable action of calling in the debt”, leading to the collapse of the group and the threat to the employees.
ACC opposed the appointment of the examiner, saying it did not make commercial sense for a firm with only two assets, including a partially-built office block in Sandyford, Co Dublin, that needed up to €6.5 million to complete.
The Irish Times
Stairway to nowhere
Posted by Southofdub at 11:15 AM