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What’s in the weekend papers?
23 March 2009
Investment group profits after examinership. Pub chain’s suitor jilts Senator. Freefall for property developers and retail businesses linked to housing. Landlord stays firm on Grafton Street rent while provincial shopping centres struggle. Banks readjust – or not – to the new economic reality.
Investment
Good news for the insolvency community this weekend in Slimmed-down ISTC makes €1 million profit. The Sunday Business Post says “Tiarnan Mahoney’s International Securities Trading Corporation (ISTC) made profits of almost €1 million in the nine months following its rescue by London-based investment banking firm Collins Stewart last march.”
ISTC, which provides capital funding to banks, had spent months in examinership after losing over €800 million. Creditors were given just 12c for every euro owed. Collins Stewart bought it from examinership and invested €5 million to help a much smaller ISTC to resume trading.
Hospitality
The Thomas Read Group pub and restaurant chain lost all hope this weekend as its potential investor, Tom Anderson, walked away and the group was put into receivership.
One of the losers is Donie Cassidy, says the Sunday Independent in Pub chain cash blow for Senator. The paper says Cassidy was due a six-figure dividend on his 20% stake in the chain’s eight airport bars, totalling an estimated €350,000. The stake was held through his family investment company Wentridge Investments.
Property
Tuskar
A property group that failed last year with debts of more than €50 million is in the headlines again with Tuskar director’s assets are seized by bank in the Sunday Business Post. Bank of Scotland (Ireland) seized dozens of offices units, a number of houses and townhouses and 25 apartments from company director and Wexford businessman Alan Hynes, on foot of a personal guarantee. The institution has appointed Declan Taite as receiver and manager of Hynes’ assets. Personal guarantees are unusual in plcs but the bank holds several million euros worth from 56 shareholders.
Hynes was a director of Tuskar property group. Five of the group’s six companies went into liquidation in January after failing to emerge from examinership. Liquidator Kevin Hughes indicated to a High Court judge last month that there might be substance to serious allegations made about the conduct of some of the group directors. The liquidator’s investigation continues.
Danninger
The Sunday Times’ Danninger offers creditors 60c says property developer Liam Carroll’s embattled operating group has offered trade creditors 60c for every euro owed. The company is battling liquidity problems through a debt restructuring organised by KPMG’s veteran restructuring expert, Sean Mooney. Mooney is best known for the country’s biggest bailout – Larry Goodman’s Goodman Group.
Some creditors have managed to secure a better deal. “A groups of creditors, owed close to €15, negotiated a payment of 75c in the euro through its credit insurer, Altradius. For these creditors, outstanding balances will be met by the insurance company,” says the article.
McInerney
Barry’s O’Connor’s house building company is negotiating with lenders according to McInerney may take €100m write down in the Sunday Independent. The value of many land banks is in question following the housing implosion. McInerney’s holdings were written down by €28 million last summer and the company claimed its land bank values were sound. All has changed utterly and McInerney has renegotiated lending covenants with its bankers to the tune of a possible €100m-plus write down, claims the paper.
Paddy Kelly
The financial affairs of property developer Paddy Kelly, who said last week that he was considering bankruptcy, became clearer this weekend. The Sunday Times revealed that Kelly owes Anglo €700m but is confident he can work his way out of the huge debt pile.
Kelly is one of 15 borrowers who owe the nationalised bank more than €500m. The government said that Anglo will not be wound down and that it is changing its focus from property lending to small business.
The Sunday Business Post claims that Kelly’s project debts total more than €2 billion. “Industry sources said that the property developer and investor had ’40-plus partnerships’ in Ireland and overseas and was the lead promoter on many of the ventures. The paper says Kelly’s share of the debt is more than €500 million.
Although he talked bankruptcy last week sources told the paper this was highly unlikely. “Instead, the 64-year-old it intent on striking deals with his creditors and lenders.” It’s probable that Kelly and his advisers favour a court-approved personal scheme of arrangement.
Prestige Group
The Sunday Times reports on the sum owed by the high-profile property investment adviser that went into liquidation last week in Prestige has €6m deficit. “The company, founded by Paul Coghlan, went into liquidation on Wednesday. Paul McCann, of Grant Thornton, and Jim Stafford, of Friel Stafford, were approved by creditors as joint liquidators.” The company trades as Kaizen Property International. Unsecured creditors are owed €1.7 million and investor loans total €4million. Coghlan is exposed by an estimated €1.5 million.
Retail
Shopping centres
Investors’ retail therapy may be heavily discounted according to a report in the Sunday Business Post: Investors face shopping centre losses. “Property investors stand to lose millions from the possible collapse of at least five provincial shopping centres, with large numbers of tenants unable to meet their rents and service charges according to informed property sources,” claims the broadsheet. The shopping centres, which opened at the height of the boom, are not named but retailers are said to be unable to afford rents due to fall off in sales. The Central Statistics Office said retail sales fell by 20% in January, the sharpest decline on record.
River Island
The Grafton Street landlord and retailer face-off continues, as the Sunday Times finds No rent freeze for River Island. Developer David Daly has refused a rent freeze on River Island’s Grafton Street premises and, after arbitration, the retailer now faces a 2.5% rent increase. “Its rent is being hiked by €52,500 from the €2.1m level agreed in 2003 – at that time more than double the going rate on the street.”
Superquinn
Select Retail Holdings Limited (SRH), owner of Superquinn, is talking to its banks after shelving plans to redevelop some of its stores. In Retailer pleads for time on debt, the Sunday Times says the grocery group is asking AIB, Bank of Ireland and Danske Bank if it can repay its debts over a longer period. SRH laid off 400 workers in January.
The consortium bought the supermarket brand for €450m in January 2005 and then sold six shops for €142.5m to Friends First in a sale and leaseback scheme. In a property play “it then bought the Montrose Hotel site in Dublin and other development properties for expansion of the chain,” says the paper.
Qualceram
The Irish Independent’s article, Qualceram considers options as shares slump, outlines the bathroom product maker’s decline. The company is “exploring examinership or receivership among its options as it continues its attempts to pull out of sale and lease back agreements with its landlord and banks in the UK, sources said yesterday” says the paper.
The bathroom specialist’s share price fell to the floor last week – from 75c to 12c on Thursday. It has traded as low as 6c recently. The company maintains that negotiations with landlords and banks are proving challenging while sales are affected by the property slowdown.
Services
The Sunday Business Post reports that a Road sweeping firm collapses with debts of almost €8 million. After suffering from cash flow difficulties, Irish Sweeping Services (ISS) has been appointed a provisional liquidator, Paul McCann of Grant Thornton. The company continues to trade but is trying to sell its contracts and assets. It employs 30 people.
Banking
The banks continue to make headlines this weekend as their directors, managers, regulators, experts, investors and customers all struggle to understand the implications of the new trading environment. A selection of headlines:
The Sunday Tribune
www.tribune.ie
AIB comes to rescue of government with Ireland Inc debt purchases
Nationwide admits that nationalisation is a serious risk
Keep bankers out of bad loan scheme – Bacon
Private equity wants big stake in EBS
The Sunday Business Post
www.sbpost.ie
Revealed: Fingleton’s €28m pension deal.
Bad bank planners look into bonds
Gamble backfires for AIB’s small shareholders
The ‘bad bank’ solution to debt gains momentum
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