Siac’s future remains undecided after three creditors claiming they are owed a total of more than €30 million yesterday challenged a proposed rescue plan for the construction group in the High Court.
Investors, including owners the Feighery family, directorFinn Lyden, French group Colas and private backer Ducales, are willing to put €10.5 million into the troubled group under the terms of a rescue plan proposed by High Court-appointed examiner Michael McAteer of Grant Thornton.
But two Polish businesses – Karmar, which says it is owed €30.7 million, and Cemex Polska, which is claiming €1.3 million – and former worker Costal Istrate, who has a personal injuries judgment for €110,000 against the group, challenged the plan on various grounds in the High Court yesterday.
Mr Justice Peter Kelly said he would deliver a ruling on Wednesday next, meaning Siac, which has been under High Court protection from creditors since Mr McAteer was appointed in late October, must wait until then to see if the rescue plan can go ahead.
Siac Construction and eight related companies owed €42 million to three banks and an estimated €26 million to unsecured creditors when they sought High Court protection.
Siac Butler Steel was wound up recently with the loss of eight jobs. The High Court heard yesterday that a further 30 to 40 employees out of the remaining 250 may be laid off if the group was rescued, although the business stressed that it wanted to minimise redundancies.
Under the rescue plan – or scheme of arrangement – the group will be split in two. One part, controlled by Siac Holdings Ireland and including Siac Construction and other subsidiaries not involved in the examinership, will form a new, debt-free operating business.
The second part, headed by Siac Holdings Ltd, will take on the group’s €38 million secured property debt. The assets involved are understood to be valued at €37 million. This is being done with the support of the three banks, KBC Bank,Bank of Ireland and Bank of Scotland.
Of the €10.5 million the investors have pledged, €7.7 million will be used to pay creditors, with €5 million of this going to those with secured liabilities.
Preferential creditors will receive a 10 per cent dividend and unsecured creditors will be paid 5 per cent. Counsel for Mr McAteer said these creditors would get nothing in the event of a receivership or liquidation.
Siac is taking court action in Poland arising out of a motorway project it had to abandon. This could yield €113 million. The scheme proposes to pay further dividends to creditors if the litigation goes in its favour.
Karmar, a sub-contractor, worked with Siac on the motorway. Its claim consists of €16 million for completed work and the balance of the €30.7 million in damages. The court was told the examiner only recognised liabilities for amounts invoiced. He has listed it as an unagreed, unsecured creditor for €3 million. Mr McAteer’s counsel also said 90 per cent of the Cemex claim had already been paid by an insurer.
Siac consented to judgment for €110,000 and costs in Mr Istrate’s favour in December. He has been offered 10 per cent of this under the scheme.
Siac said it was willing to ma- ke him a further ex-gratia offer. Source. Irish Times.