SIAC Construction Ltd and eight related companies, including the ultimate parent company in the 100-year-old giant construction group, have secured court protection to allow for preparation of a survival scheme.
The nine companies employ about 250 people full time and are "in a clear position of insolvency" arising from the economic downturn and losses resulting from SIAC's involvement in Polish road building projects, the High Court was told this evening.
The companies owe their lender banks some €42 million, it was stated in the directors’ petition.
Since 2008, the turnover of SIAC Construction Ltd (SCL) has fallen from €265 million to €113 million, the petition stated. SCL also has trade creditors of some €26.1 million, additional current liabilities of €4.5 million and other sums totalling some €24.7 million due in contract and rectification provisions and intercompany liabilities. Polish creditors had outstanding claims of some €7.4 million.
The directors said SCL is under significant pressure from its trade creditors and any petition for its winding up would have a “catastrophic domino effect” on the group as a whole.
The directors also outlined SIAC has, with others, taken legal action in Poland arising from involvement in road contracts there, with the value of SIAC's share of those claims about €113 million.
The various SIAC companies are involved in continuing and completed projects and are believed to have a reasonable prospect of survival, Lyndon MacCann SC, with Rossa Fanning, for the companies, said when presenting the petition.
SIAC’s share of various contracts was valued at about €98 million and it anticipated further contracts valued at some €7 million would begin before Christmas, the petition stated. Its civil engineering division had also identified potential opportunities of more than €1.1 billion in various sectors of the Irish and UK markets.
Ms Justice Mary Finlay Geoghegan agreed to grant protection to SCL and the eight other companies on the basis of reports from independent accountants expressing the opinion the companies have a reasonable prospect of survival as a going concern provided several conditions are met, including securing creditor and court approval of survival proposals.
The companies are among some 50 other companies in the group, established in 1913 and one of Ireland’s oldest construction companies, the court heard. Not all of the 50 are trading. The nine include SIAC Holdings Ltd, the ultimate parent company with registered offices in Clondalkin, Dublin.
The judge stressed she was not making determinations at this stage as to whether the companies actually have a reasonable prospect of survival but she was satisfied there was evidence supporting that opinion.
She also agreed to appoint Michael McAteer as interim examiner.
When a sub-contractor creditor of the companies, Graham Sheehan of Saber Electrical, asked the judge whether he might say something, the judge said this was an ex parte application (made by one side only) and she was not determining any issues which would be decided on the full hearing of the petition on November 6th.
The judge said she had been told the companies’ lender banks were not opposing the petition for protection but she would inquire whether any creditors or others wished to say anything.
Jane Marshall, solicitor, representing KBC Bank, Bank of Ireland and Bank of Scotland, said they were neutral on the protection application.
The judge told Mr Sheehan he could outline what he wished to say. Mr Sheehan said, having dealt with SIAC Construction, the court would have to have faith the company was being honest. He had “listened for months” to promises he would be paid but he had not been. SIAC had not been truthful with him and there was an issue whether the court could trust it, he added.
The judge stressed she was making no decision on the merits of the application other than to grant protection at this point.
The nine companies are SIAC Construction Ltd; SIAC Holdings Ltd; SIAC Holdings (Ireland) Ltd; SIAC Bituminous Products Ltd; SIAC Butlers Steel Ltd; Lilymount Ltd; SIAC (Clondalkin) Ltd; SIAC Baldonnell Ltd and SIAC Property Retailers Ltd.
