Supermarket portfolio on market after AIB talks fail
Three SuperValu outlets and a Centra, all in Galway, will be marketed for sale over the next three to six months after lengthy negotiations between nationalised lender AIB and the group's two directors collapsed.
AIB has taken control of the four supermarkets run by Galway businessmen, Tom and John Nestor, appointing Grant Thornton as receivers to recover over €9m worth of outstanding debt.
The shops employ close to 190 people in total.
The receivership comes after a long-running legal skirmish between the bank and the businessmen, which in 2015 resulted in AIB obtaining a judgment order over €9.3m of unpaid loans.
Musgrave Group, the owner of the SuperValu and Centra brands, has said the change of control would not impact employees and stressed the businesses will continue trading as normal.
Supermarket chains Dunnes, Spar and Tesco, along with other Musgrave franchise operators are all expected to target the portfolio with the SuperValu stores - located at Fr Griffin Road, Oranmore and Ballybane - as well as the Centra outlet in Doughiska, generating a turnover of close to €30m.
However the valuation, which will include some of the properties, may be eroded by hefty rent obligations and the stores' multiple ownership structures.
Sources close to the deal predicted that the real estate may be separated from the business and sold separately.
Documents filed to the company's office show Paul McCann and Aengus Burns of Grant Thornton were appointed as receivers to Nestor Property and its two subsidiaries, C-Town, which controls three of the supermarkets, along with TJN, the owner of the franchised SuperValu in Oranmore, on March 21.
The latest accounts filed by Nestor Property show outstanding bank liabilities of €7.2m for the financial year ending January 31, 2015, driving the company to a €4.16m loss for the period.
While the group's results highlight the tough market conditions and the trend towards online shopping, latest accounts for C-Town reveal sharp rent increases for two of the supermarkets.
The annual lease rose to €306,000 on two properties, owned by Tom and John Nestor, up from €178,280 in the previous year.
AIB also holds a charge over the businessmen's personal debts.