Business

Thursday 27 April 2017

How firm that closed Clerys got €17m loan on day store was sold

Loan was made by Irish subsidiary of US firm which later received €50m in funding from the Irish State, write Sean Duffy and John Mulligan

A restored former Dublin Bus passes Clerys on O’Connell Street Picture: Gerry Mooney
A restored former Dublin Bus passes Clerys on O’Connell Street Picture: Gerry Mooney

Sean Duffy and John Mulligan

Natrium, the company used to buy - and shut - Clerys department store, received a €17m loan on the same day that the landmark store was sold.

The loan was given to Natrium by an Irish subsidiary of US investment fund Quadrant, which subsequently received €50m from the Irish State to finance property development in Ireland.

The Irish Strategic Investment Fund (ISIF), which gave Quadrant the €50m, now insists the monies will not be used by the new owners of Clerys.

These new details have emerged on the one-year anniversary of the hugely controversial closure of Clerys on O'Connell Street.

Documents released by the Irish Strategic Investment Fund (ISIF) confirm that the State agency provided €50m in funding to Atlanta-based property firm Quadrant under the terms of a deal agreed last November. That was used to establish a €100m fund for financing property development in Ireland.

In June last year Quadrant backed the highly controversial €29m takeover of the Clerys department store by Deirdre Foley's D2 Private and Cheyne Capital Management. The deal resulted in a mass layoff of hundreds of long-serving staff.

Company filings reveal that a Dublin-based Quadrant vehicle - Qrea Ireland - provided €17m to a borrower, understood to be Natrium, on the day Clerys was sold this day last year. That €17m loan carries a 7pc interest rate and is due to be repaid this day next year.

Redevelopment of the landmark Clerys building is set to cost millions. The property has lain idle since it was sold.

The ISIF cash is earmarked for property investment across the country. Details of individual Quadrant projects benefiting from the cash have not been made public. However, a spokesman for ISIF said none of its money will be used by the new owners of Clerys.

The previous owners of Clerys, Gordon Brothers, had split the iconic retail business into two separate entities, one which owned the property, and another which ran the operating business.

Natrium sold the operating business to UK insolvency practitioner Jim Brydie after it made the purchase.

Brydie requested that the High Court appoint KPMG as liquidators. Once the request was granted, the liquidators moved in to inform the staff at Clerys that their jobs were gone with immediate effect. In total, 460 jobs were lost, and concession retailers were owed over €2m.

Natrium later announced plans to redevelop the site, a move it claims would create 1,700 jobs. The sale sparked widespread anger at the treatment of the workers.

The State had to pay the staff statutory redundancy, as the liquidated firm did not have funds to make additional redundancy payments.

D2 Private and Ms Foley were recently granted leave by the High Court to challenge powers used by inspectors investigating the collective redundancies of Clerys' workers.

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