A PRIVATE equity firm behind the proposed rescue of housebuilder McInerney has asked its banks to accept repayment of €60 million of the €111 million total that the group owes them.
McInerney’s Irish-operating businesses yesterday asked the High Court to confirm the appointment of accountant Billy Ó Riordain as examiner to the five companies involved.
Such a move would give them protection from their creditors, and allow up to three months for Mr Ó Riordain to come up with a rescue plan for the insolvent firms. Under the plan, a syndicate of three lenders, Bank of Ireland, Anglo Irish and KBC, would have to accept €60 million out of a total of €111 million that McInerney owes it.
The syndicate’s debt is secured. Its senior counsel, Rossa Fanning, told the High Court yesterday that its members were opposed to the examinership on the grounds that they would have a better chance of recovering more of their money in a receivership.
The three estimate that they could recoup up to €90 million of what is owed, although McInerney’s senior counsel, John Hennessy, argued the banks produced no credible evidence for this.
The rescue plan involves a €10 million investment from US-based private equity firm Oaktree Capital, which wants to take a stake in the overall group.
Oaktree has been in talks with the syndicate since July. Last week it put a proposal involving a reduction in the secured debt to €60 million to the three banks.
The High Court heard yesterday that on Tuesday Brian O’Connor of Bank of Ireland and Ted Webb of KBC told Oaktree director Justin Bickle that the “door is still open” for talks on the basis of that proposal.
The banks told Mr Bickle this several hours after their lawyer initially told the High Court that they were opposed to the examinership plan, which is based on the same figures.
The rescue plan runs over five years and is based on McInerney earning revenues of €5 million in 2011, double that the following year, and increasing up to €25 million in the fifth year.
The banks would receive no repayment for the first two years, and would have to provide additional facilities of up to €1.6 million. Repayments would start in the 2013, beginning at €294,000, but then increasing rapidly so a total of €35 million would be repaid after five years.
Oaktree, which owns Britain’s biggest mortgage broker Countrywide, said it would also be in a position to provide buyers of McInerney houses with mortgages.
McInerney has operations in Ireland and Britain. Oaktree wants to buy a stake in the entire group for €40 million, €10 million of this would be invested in the Irish business and €30 million in Britain, where the group is generating a profit.
