Shareholders will take €250m hit from Roex liquidation
Shareholders look set to lose close to €250m following the liquidation of Reox Holdings, the company which was spun out of Dairygold Co-op in 2006.
It has emerged that shareholders are to lose up to 98pc of the peak value of their investment following the winding up of the company.
The holders of the 92.5m shares in the property and food business have been paid an interim 4.8c/share. An accompanying letter stated that the final payment will be of a lesser amount. Dairygold sources suggest that the total final payout could be around 7c/share.
Shareholders voted to wind up the company and agreed to the appointment of James Byrne of James Byrne and Co, Mallow as liquidator at an extraordinary general meeting in November.
Initial payments to shareholders were made before Christmas. It is now expected that the total payout to shareholders will not exceed €6m. At its height the market value of the company was put at €259m. This means the total loss to shareholders will be €253m.
Reox Holdings plc was established in 2006 when Dairygold Co-op spun off its Alchemy Properties Division, a portfolio of property assets, and its two other food and retail subsidiary businesses, Breeo Foods and 4Home Superstores.
The intention was to proceed to a stock market listing. The Breeo business was subsequently sold to Kerry Group plc for €140m and the 4Home business closed after seven of the larger stores in Munster were sold back to the Dairygold Co-op and continue to trade as part of its Co-op Superstore network.
At the set up of Reox in 2006, Dairygold retained a 25pc shareholding in the company and also supported its initial capitalisation with a €33m redeemable interest-bearing bond.
The shares launched on the grey market in July 2006, at a price of €2 per share, but reached their peak value of €2.80 in early April 2007.
The severe downturn in the Irish economy and collapse in property prices since 2008, severely impacted on the fortunes of Reox Holdings. Losses rocketed to in excess of €30m per annum with the turnover dropping from €131m to €20.5m per annum.
In 2014 Dairygold Co-op acquired a portfolio of 18 properties in a debt-for-asset swap agreement with Reox. They included development assets at South Terrace, Cork City; Kinsale Road, Cork; Long Mile Road, Dublin; Annacotty, Co Limerick; and one overseas holding in Ilminster, in Somerset, England.
The shares in the ill-fated company were never launched on the stock market. They were bought and sold via the so-called grey market, mainly through the company's two stockbroking firms, Davy and Goodbody, at up to €2.80 per share.
A brief letter accompanying the payment to 4.8c/share to each of the shareholders stated: "Please note this is an interim distribution. A final, smaller distribution is expected to be paid in the second half of 2015."
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