Six investors circle troubled construction giant SIAC
SIX potential investors have expressed an interest in buying into troubled building engineering giant SIAC Construction, the High Court heard yesterday.
Mr Justice Peter Kelly confirmed interim examiner Michael McAteer as examiner for SIAC Construction Ltd and eight of its related companies, saying he was satisfied proposals for a survival scheme had surpassed the threshold required for the court to exercise its discretion to appoint an examiner.
Mr McAteer, of accountants Grant Thornton, now has 100 days to come up with a survival plan for the business. The court heard he hoped to hold a creditors' meeting as soon as December 18.
It also heard there were no objections to the examinership and the companies' main bank, Bank of Ireland, had agreed to continue to provide capital funding during the examinership while their 250 employees had also expressed support. Between 20 and 30 letters of support for the companies had come from a number of SIAC clients.
The 100-year-old business survived World War I, insurrection, Civil War, World War II, and the "dreary days of the 1950s" before it was "unfortunately brought to its knees by the financial collapse in this country in the last number of years", Mr Justice Kelly said. Despite maintaining profitability after the 2007 crash right up until 2011, it moved into a €4m loss situation in 2012 and this was largely the result of the collapse in the domestic building industry, he said.
SIAC then tried to diversify into Poland and it would not be an overstatement to say this was a disastrous venture, the judge said. SIAC has, with others, taken legal action in Poland arising out of involvement in road contracts, with claims worth an estimated €113m, the court heard.
Mr Justice Kelly said the companies' creditor banks, Bank of Ireland, KBC and Bank of Scotland, which were neutral on the examinership, were owed €40m but this was an extremely worrying time for all involved, including creditors and employees. One positive side of the case was that the companies' obligations to the Revenue were up to date and, in fact, were due payment from the taxman, he said. This was an unusual feature of an examinership, but it indicated a company that was well run, he said.
There had been six expressions of interest in investing received by the examiner. Between €5m and €8m, either as debt or equity, or a combination of both, is required to rescue the business and a number of the interested parties are aware that this is the level of investment that will be required, the judge said.
The judge also said the support of a number of clients of SIAC was an important feature of the proposed survival plan, in particular one from the National Roads Authority (NRA) which says SIAC has tendered for two very large national road projects.
The NRA had advised the company that should it exit examinership, it would be fair to assume that it would receive contract work for national roads, the judge added.
Since 2008, the turnover of SIAC Construction Ltd has fallen from €265m to €113m, the directors said in their petition.