Loss-making ISTC finally faces liquidation by Collins Stewart
ISTC, the finance company that lost €820m for banks and hundreds of wealthy Irish investors, is to be finally liquidated over the next two months, its owners have revealed. The company has not been trading for several months.
The specialist lender made one of the largest losses in Irish corporate history and ended up being sold off for just €5m to current owners Collins Stewart. Earlier this year, there was some talk about it being bought from Collins by its original founders, but this possibility now seems remote.
"The directors intend to liquidate the company and this process is scheduled to begin in late 2010," state the company's latest accounts. A number of resignations have hit the company in recent months, among them original founder Tiarnan O'Mahoney, the ex-Anglo Irish executive.
The company will be bowing out sitting on a loss of €1.9m after tax.
The company only had income at the end of 2009 of €1.1m, almost half the amount registered the previous year.
The shareholder's equity left in the company is €4.2m which should now go to Collins Stewart, after costs are discharged.
It should mean Collins taking a small loss on its original €5m investment. The company had eight staff in the past year, the accounts for Collins Stewart ISTC state, with total wages and salaries coming to €1.6m.
"The company incurred significant losses during the financial year as a result of a difficult trading environment. Following an indepth strategic review of the company's future viability, the directors decided to wind up the company."
Investors and banks took a hit of €820m when the lender got into trouble in early 2008, becoming one of the first Irish casualties of the sub-prime crisis and the resulting freeze-up on inter-bank markets.
The crisis led to a massive drop in the value of investments, knocking tens of millions off the value of ISTC's assets and forcing it to seek High Court protection.
Collins Stewart took over after a scheme of arrangement was reached. The UK broker and wealth manager gave the business a certain period of time to prove itself, but was unhappy with the results.
Several high-profile names lost money in the ISTC collapse, including businessman Sean Quinn. Some 125 wealthy individuals put together by Friends First also lost their investment.