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More SIAC jobs at risk if High Court approves scheme

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Judge Peter Kelly

Judge Peter Kelly

Arthur Carron

Judge Peter Kelly

THE workforce of construction giant SIAC could be cut to 160 from the present 200 if a proposed survival scheme for seven key companies in the group is approved by the High Court.

Judge Peter Kelly will give his decision next week on whether to approve the scheme.

Employees working for the company told the Irish Independent yesterday that they were anxious about the plan and had only been told about the new threat to jobs this week.

The scheme proposed yesterday by examiner Michael McAteer will see the group being effectively split into two – an operating division and a property holding division, with some €10.7m invested in it.

The scheme gives the companies a more than reasonable prospect of survival as a going concern, examiner barrister James Doherty said.

Of the €10.5m sum, almost half will go to its largest creditors, the three banks who have agreed to continue to provide credit facilities to the companies and are supporting the survival scheme. Those are Bank of Ireland, Bank of Scotland and KBC Bank, who are owed an aggregate €42m.

Just €2.7m will be available for the other creditors, with preferential creditors getting 10pc and trade creditors getting just 5 per cent of what they are owed. The companies have a total of 1,255 creditors, including 876 Irish/UK creditors and 379 Polish creditors.

The costs of the examinership will be between €400,000 and €500,000, the court also heard. The remaining €2m of the €10.7m investment will be used for capital injection.

Some creditors, including Karmar, a Polish company claiming to be owed some €30m, and Cemex Polska, objected to the scheme, arguing it unfairly prejudiced their interests.

In seeking approval of the survival scheme, Mr Doherty said SIAC experienced difficulties as a result of the financial crisis.

However, it was "tipped over the edge" as a result of its "disastrous" involvement in Polish building contracts, he said.

SIAC has taken litigation in Poland and, if it won that case, that would provide a substantial uplift for creditors, he added.

The only alternative to the examiner's proposals was either liquidation or winding up which would have "catastrophic" consequences, including a €120m deficit and even less available for creditors, he argued.

Irish Independent