€83.2m Greenstar loans called in
IRELAND’S BIGGEST waste management group, Greenstar, was placed into receivership yesterday after a consortium of seven banks called in loans of €83.2 million.
This followed a breach in 2011 of the covenants attaching to the borrowings.
The decision by the banks to call in their loans resulted in the board of Greenstar appointing David Carson of Deloitte as receiver.
Mr Carson said the business would continue as a going concern with a view to effecting a trade sale. The company has 800 staff.
He said a number of parties had expressed an interest in acquiring the business.
“My initial priority is to engage with those who have already expressed an interest in acquiring the business of Greenstar and to identify other potential buyers,” Mr Carson said.
It is understood that NTR recently offered to acquire the loans off the banks at a significant discount but this was rejected by the lenders.
NTR was also owed €35.5 million by Greenstar, which racked up its debts through a number of acquisitions here during the boom years.
Irish-American businessman David McCourt and US billionaire Walter Scott were recently linked in reports with a joint bid for Greenstar along with US private equity firm Gores Groups.
Reports suggested they were willing to pay €50 million for the business, with the banks writing off the balance of their loans.
The syndicate of lenders comprises AIB, Bank of Ireland, Ulster Bank, HSBC, Barclays, Rabobank and Bank of Scotland (Ireland).
Greenstar has effectively been up for sale for the past two years.
Greenstar Holdings Ltd made a loss of €64.1 million in the year to the end of March 2011 compared with €11.9 million in the previous year.
Its revenues increased by €26.9 million due to the acquisition of two businesses.
The company took an impairment charge of €49.9 million in its 2011 accounts, and the net assets of the business were written down to €25.6 million as a result.
This resulted in the company breaching its debt covenants and meant the loans were immediately repayable to the banks.
NTR has written off its investment in Greenstar.
The board of Greenstar yesterday expressed its “disappointment at the unexpected move” taken by the lenders to demand immediate repayment of its facilities without “any prior indication or notice”.
“It is regrettable that they have chosen to take this action at this time in respect of a business that had not missed any scheduled repayments to its banks and was in a strong cash position to continue trading for the foreseeable future,” the board added.
Greenstar was founded in 1999 and serves 15,000 commercial customers and 80,000 households here.
It operates from 20 licensed sites across the State.
Its revenues have been under pressure in the downturn due to a reduction in waste volumes and reduced prices for landfill and commercial waste.
* This article was amended at 1.18pm on Friday, August 24th to correct a factual error