Banks and Quinn set to lose out as McInerney enters into examinership
Published 27/08/2010 | 05:00
ANGLO Irish Bank, Bank of Ireland, Quinn Insurance and foreign lender KBC are among those likely to lose out as McInerney's Irish division goes into examinership, with the housebuilder blaming NAMA in part for its plight.
Anglo Irish and Bank of Ireland are believed to be owed €111m between them by McInerney. This amount is set to take a major write-down as McInerney pushes to bring in an outside investor and reduce overall debts of €240m.
Quinn Insurances holds a 4.6pc stake in the company and the Quinn family has been reported to own a larger stake in the McInerney business.
These stakes are set to be either entirely wiped out or hugely reduced in value through the examinership process.
Yesterday, McInerney said the banks had cut its overdraft facilities upon instructions from NAMA. While the agency refused to comment on this, it is understood that it strongly denies this claim.
It is understood that it asked Anglo and Bank of Ireland to present a rescue plan for the debt-ridden business, but agreement could not be reached among the lenders.
Any such rescue plan was then rendered redundant when the company itself petitioned the High Court yesterday, seeking examinership.
KBC, a Belgian lender operating in Ireland, is the chief foreign bank involved and is understood to have been more aggressive in negotiations with the company were its Irish counterparts.
The Irish subsidiary is McInerney Homes. This is the only division impacted by the examinership, with its UK operations and its Spanish unit ringfenced from the Irish moves.
US hedge fund Oaktree Capital is offering to invest €40m in the business, but only €10m of this would go directly into the Irish business.
This means that the write-downs for the Irish banks are likely to be significant. Oaktree is believed to be interested in McInerney, but only if the future debt levels are right.
An examiner from PricewaterhouseCoopers will now draw up a scheme of arrangement, which creditors, including the banks, will be able to vote on.
The Irish subsidiary has 70 days of court protection to do this, but it could ask for more time.
McInerney said it needed to go into examinership after banks cancelled its overdraft and ordered that all cash from house sales to be transferred to them. This could not be verified last night as the Irish banks were not willing to comment.
The petition for examinership is not a hostile action against the Irish banks or NAMA -- it is designed to facilitate engagement on a restructuring and provide greater recoveries than under a receivership, said McInerney during a court hearing yesterday afternoon.
It said the creditors, chiefly the banks, were likely to get more money via an examinership process than if the company was placed in receivership.