Tuesday 26 September 2017

Family behind SIAC construction firm calls in Investec to prepare rescue bid

DIGGING DEEP: SIAC shareholders have reinvested in the firm
DIGGING DEEP: SIAC shareholders have reinvested in the firm
Donal O'Donovan

Donal O'Donovan

Building firm SIAC's long-time family owners and former managers have tapped Investec to put together a rescue bid to buy the business back out of examinership, the Irish Independent has learned.

The 100-year-old SIAC Construction group was forced to apply to the High Court for examinership on October 23 after running up big losses on Polish road contracts and as a result of the construction downturn here.

SIAC Group is two-thirds owned by the Feighery family, who have now teamed up with former managers to prepare an investment offer to bring the business back out of examinership.

The shareholders, who had pumped around €20m in to support the business before it sought examinership, have further capital available for a planned rescue offer that would see them retain a majority shareholding in SIAC.

They have tapped corporate financial advisers Investec to source minority investors to help finance the bid.

Between €5m and €8m is needed to finance SIAC's exit from examinership on a sustainable basis, the High Court was told this month.

Investec is thought to be focusing its search for backers on the pool of international investors eyeing Ireland for opportunities to benefit from the anticipated recovery here.

Trade and financial backers are being sounded out about the investment, it is now understood.

Unlike more passive real estate investments, a bid for SIAC would be for a stake in an operating company – although as a well-established civil engineering business it is one that appears well positioned to benefit from upturns in both infrastructure spending and commercial property in the coming years.

The building sector remains tough, however.

If the bid succeeds, the plan is to back the current SIAC management and focus the business on its core civil engineering brand.

Accountant Michael McAteer, of Grant Thornton, was appointed as examiner of SIAC in October.

Earlier this month he told the High Court that six parties had expressed an interest in investing in the business.

It is understood that Investec and the Feighery family have not yet tabled their investment proposal to Mr McAteer.

He has indicated that non-binding, indicative bids should be on the table by November 18.

Mr McAteer is due back in court in the middle of December to report at the half-way mark of the 70-day examinership period, and it's understood the investors are eyeing that as the ultimate deadline to have finalised and submitted a proposal.

SIAC Construction Ltd and eight related companies went into examinership on November 6, following an interim examinership.

Trade creditors of the business are owed €26.1m, while its three bank lenders are owed a combined €42m.

The business employs 250 people directly, in addition to large numbers of jobs at sub-contractors of the business supported by SIAC contracts.

Irish Independent

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