Farm Ireland

Monday 20 November 2017

FBD co-op awaits energy firm decision

Darragh McCullough

Darragh McCullough

The Cork renewable energy company formerly known as Kedco is awaiting news on whether it is ready to emerge from examinership this week.

Renamed as React in 2013, the company was originally established in 2005 by prominent Cork dairy farmers, Diarmuid Lynch and William Kingston, along with dairy genetics distributor, Eddie Barrett and former SWS employee, Donal Buckley, who was the first CEO of the company.

Early investment saw the company pump millions into various biomass projects, including a sawmill in Latvia to supply wood pellets for wood-burning boilers. The company was targeting large institutions, along with agricultural and waste firms to install biomass heat and power generation systems.

By 2008, the business had racked up accumulated losses of more than €8m, and turned to the farmer-owned Farm Business Developments (FBD) for a €7m investment in return for a 25pc stake in the company.

However, it is believed that the farmer co-op increased its stake significantly in subsequent years as losses continued to grow.

Mr Buckley resigned as CEO in 2011 before the company's share price peaked at €32.50 on London's Alternative Investment Market (AIM) in 2013, valuing the company at more than €30m.

However, a number of deals have fallen through in the interim, and for the year ended June 30, 2014, the firm recorded a €15.2m pretax loss. This compared to a €3m loss in 2013.

As losses continued to mount, trading in the company's shares on the London AIM was suspended last December, and it was forced to seek the protection of the courts through examinership in May this year.

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React chairman, and Farm Business Development's representative on the React board, Dermot O'Connell said that he was hopeful that the court would rule that the company was fit to exit examinership this week.

"In the past we were too technology focused. But we have a significant number of valuable assets, so I'd be very hopeful that shareholders will get their money back," he said.

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