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No €44m debt payback sought from Treasury

Fears fail to materialise that Forum Partners could demand return of loan for Chinese deal

Bondholders that developer Richard Barrett warned could endanger Singapore-listed Treasury China Trust (TCT) unless he bought two Chinese management companies last August made no move to redeem their debt after Treasury Holding collapsed into liquidation.

Fears that a liquidation of Treasury Holdings would constitute a "change of control" and free Forum Partners, a bondholder of TCT, to demand instant repayment of Sing$70m (€44m) were the main reason given for Treasury Holdings' sale of the Chinese assets without telling creditors last August.

At the time, Treasury founder Richard Barrett had said his acquisition of Treasury Holdings Real Estate (THRE) and Treasury Holdings (Shanghai) Property Management (THPM) was done in order to prevent a potentially disastrous impact on TCT, its 500 Irish investors, and creditors of Treasury Holdings including the National Asset Management Agency (NAMA).

TCT had borrowed from Forum Partners to finance its growth, and contracts for the debt included a provision that, in the event of a change of control at Treasury Holdings, Forum could demand immediate repayment of the money owed.

High Court

The sale of the two companies was extremely controversial. The deal was announced half-way through a two-day hearing at the High Court in Dublin where KBC Bank had petitioned to have Treasury Holdings put into liquidation for failing to repay property loans.

News of the property sale prompted NAMA to back KBC's effort to have Treasury put into liquidation.

That eventually happened on October 13, giving Forum Partners 30 days to argue that the liquidation did constitute a change of control, and if it wanted, could have demanded its money back.

It didn't happen.

TCT has now told its shareholders that any such danger has passed.

"If Forum were to contend that the Treasury Holdings liquidator appointment constitutes a change of control under the bonds, the 30-day period under which Forum could issue a redemption notice for the bonds has lapsed and no claim for redemption has been made," it said in a statement posted on November 13.

Earlier this week, the liquidators of Treasury Holdings said they now planned to join creditor NAMA in pursuing a legal action against the company's co-founders, Johnny Ronan and Mr Barrett over a separate Asian asset sale.

NAMA took action against Treasury Holdings, Mr Barrett and Mr Ronan earlier this year over a deal that had seen €20m in TCT shares sold by Treasury Holdings to Mr Barrett and Mr Ronan for €100,000 in cash, and IOU.

NAMA has claimed there was no commercially valid reason for that sale and wants it reversed.

With Treasury Holdings now in liquidation, the liquidators have backed that call.

Irish Independent