O’Flynn says he can ‘immediately repay’ personal loans of €24.9m
Cork developer has written to Blackstone subsidiary saying he has ‘funds available’ to pay off debts
Michael O’Flynn of the O’Flynn Construction group. The Cork developer said he had informed Blackstone that he had funds available to immediately repay a loan of €16.7 million. Photo: Daragh Mac Sweeney/Provision
In a statement the Cork developer said he had informed Blackstone that he had “funds available” not only to “immediately repay” a loan of €16.7 million it had demanded from him but also to repay in full all of his personal borrowings which total €24.9 million. Mr O’Flynn declined to comment on the source of this funding.
Carbon Finance had last month sought to appoint receivers over some of Mr O’Flynn’s properties when it believed that he was not in a position to repay his personal loans.
The Blackstone subsidiary acquired €1.8 billion in loans secured against the Cork-based O’Flynn Construction group from the National Asset Management Agency, in May for €1.1 billion.
The deal made it the business’s principal creditor, giving it the power to call in the security for those debts, namely the group’s assets and companies.
After demanding Mr O’Flynn repay his personal loans on July 29th, Carbon moved against the developer within hours.
It appointed receivers over a number of assets of the O’Flynn Group and applied in the High Court to appoint Michael McAteer of Grant Thornton as interim examiner at the end of July to its four trading companies, O’Flynn Construction Company, O’Flynn Construction, O’Flynn Construction and Eastgate Developments.
“Carbon openly admitted in the court proceedings that service of the personal demands was undoubtedly designed to bring about an event of default on the corporate facilities,” Mr O’Flynn noted in a statement.
“On 29th July the High Court granted an ex parte application by Carbon for the appointment of an interim examiner which O’Flynn Group is now seeking to have removed on the basis that Carbon Finance Limited failed to disclose all material matters to the court in its application,” it added.
“These included, for example, the fact that the companies were up to date in all their payment obligations, had significant cash on hand, had been cooperating with Carbon and supplying it with financial information and that there existed a number of disputes about how the loan facilities were now being operated by Carbon as compared to Nama,” the statement said.
Mr O’Flynn said he was applying for an order to the effect that the demands in relation to his personal loans, which he said were being fully serviced, were “unlawful and that, as a consequence, the steps that followed were also invalid.”
“The O’Flynn Group of companies have been in business for 36 years, including successfully navigating and exiting the Nama scheme in May of this year when Carbon purchased its loans,” his statement concluded.
Blackstone could not be contacted for comment. Mr O’Flynn’s case is due before the High Court tomorrow when Ms Justice Mary Irvine is expected to decide whether or not to set aside the examinership process and oust receivers to his assets.