Barrett firm pays €2.2m for two Chinese subsidiaries of Treasury
Treasury Holdings was paid €2.236m in cash for two Chinese subsidiaries sold to the property group's own part-owner Richard Barrett, the company said.
Treasury's main lender NAMA knew the deal was on the cards well in advance of this week's surprise announcement, Mr Barrett told the Irish Independent last night
On Tuesday, Treasury Holdings sold two subsidiaries; Treasury Holdings Real Estate PTE and Treasury Holdings (Shanghai) Property Co Ltd, to a firm based in Jersey that is ultimately owned by Mr Barrett.
The sale of the two debt-free property management units was revealed in the middle of lender KBC's court battle to have Treasury shut down.
The High Court has demanded a full report into the circumstances of the sale.
The transfer of ownership of the companies in the middle of a liquidation hearing stunned lawyers for KBC, who want Treasury Holdings to be shut down and its assets sold off to repay debts.
Mr Barrett said the decision to sell the subsidiaries was taken after he became convinced at the start of this week that there was no prospect of agreeing an out-of-court settlement with KBC to deal with Treasury's unpaid debts.
Mr Barrett paid €2.236m for the companies. It was the higher of two independent valuations obtained from accountancy firms, he said.
The accountants cannot be identified because of confidentiality agreements, but neither is Treasury's own auditor, he said.
Speaking from the Far East, where he is now based, Mr Barrett said the deal needed to be done because the appointment of a liquidator to the Treasury Holdings Group would have triggered demands for a €44m repayment from lenders in China -- unless the local units were sold before the threat was realised.
That in turn would have wiped out the value of a €24m IOU held by Treasury Holdings and secured by shares in a linked Chinese real estate venture.
That IOU is Treasuy's most significant unencumbered asset and will go to help pay off debts to NAMA, Mr Barrett said.
In court, the deal was cited as the final factor that convinced Treasury's biggest lender, NAMA, to join KBC in trying to have the firm put into liquidation.
Treasury Holdings said NAMA was aware in advance of plans to sell the Chinese subsidiaries, if Treasury was at risk of being closed down.
NAMA has no veto over a sale, but Mr Barrett said he had informed NAMA's chief executive that a sale could happen as far back as last December.
NAMA agreed in principle to such a deal, as long as the price was fair, Mr Barrett said. NAMA last night declined to comment.
The price is made up of "net asset value" of between €1.9m and €2m plus a consideration for future profits.
Treasury Holdings figures suggest profits at the two units will be €1.68m this year, but are projected to fall next year.
Neither of the two companies owns any real estate in its own right. They are management units and are paid fees by Treasury China Trust, a listed property venture, for managing its property portfolio.
Accounts filed for Treasury China Trust's report that it paid around €15m in fees and charges last year to Treasury Holdings Real Estate PTE and Treasury Holdings (Shanghai) Property Co Ltd.