Wednesday 22 November 2017

Shares halve in Barrett and Ronan's Chinese property unit

Donal O'Donovan

Donal O'Donovan

Further headache as Treasury Holdings faces liquidation

SHARES in Richard Barrett and Johnny Ronan's Chinese property venture have almost halved in value over the past year while the battle to keep their Irish group in business raged through the courts here.

That battle will end today with the appointment of Michael McAteer and Paul McCann of Grant Thornton as joint liquidators to the Treasury Holdings Group.

However, the sharp decline in the value of the Asian investments means today's liquidation of their main Irish business, Treasury Holdings, is not the only headache for the former billionaire property players.

Singapore-listed Treasury China Trust (TCT) is an independently owned, listed property investment vehicle set up by the Treasury team to tap into the booming Chinese property market.

The firm controls Chinese property assets valued at 13.3bn Chinese Yuan, or around €1.6bn.

The Chinese property investment has been the major focus for Mr Barrett in particular since the bottom fell out of the property market here in 2007.

However, despite its stand- alone status, the venture has not been completely insulated from the Irish situation.

Share trading in Singapore was suspended for a period last month following media reports here in relation to the sale of the related company that acts as trustee manager of the TCT assets of Mr Barrett.

Meanwhile, shares have dropped by almost 50pc since September 2011 -- to last night's closing price of Sing$1.08 per share from Sing$2.00 per share.

Since the start of this year shares have fallen by 28pc.

That's bad news for founders Mr Barrett and Mr Ronan, who own around 30pc of the listed venture, in part thanks to a controversial sale in 2010 by their Treasury Holdings business of a stake of close to 10pc in the venture to the two men.

The stake, valued at the time at €20m, was sold for a consideration of €100,00 and an unsecured loan.

Treasury Holdings' main creditor, NAMA, has claimed in court that the sale amounted to an "asset transfer" and has sought to have it reversed.

That case remains pending and means the China venture is likely to become a significant focus for the Grant Thornton team thanks to significant links that remain between Treasury Holdings and Treasury China Trust.

Explanation

The most pressing issue for liquidators will be the status of former Treasury Holdings subsidiary Treasury Holdings Real Estate (THRE). It acts as trustee-manager of TCT, but was, along with a related property management, sold in August to a company owned by Mr Barrett for €2.26m.

This was after the legal effort to have Treasury Holdings put into liquidation got under way.

Mr Justice Brian McGovern ordered an explanation of the sale immediately after it was announced, which is set to be considered in court today.

Liquidators may also seek to have the transaction cancelled.

If they do, and succeed, TCT has warned it could allow creditors in China to demand a €44m debt repayment from TCT, because of the change in control, with potentially dire implications for TCT shares, including the Barrett and Ronan holdings.

Irish Independent

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