The High Court has appointed a provisional liquidator to two companies within the SIAC construction group.
The application was made in respect of the two trading companies within the group: SIAC Construction Ltd, which has a net liability of €12.3 million; and SIAC Roofing and Cladding Ltd, which was profitmaking for several years but is predicted to have losses of around €500,000 in 2023.
Both firms have a registered address at Clondalkin in Dublin. The two firms have about 100 employees in Ireland and, the court heard, the workers will have to be informed that there is insufficient cash to pay them.
The SIAC group, which has been operating in the building, civil engineering, roofing and cladding sectors since 1913, claims it has experienced severe cash difficulties in recent years, resulting in the companies becoming loss-making and insolvent.
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It has worked on many high-profile civil engineering projects, including the recent upgrade of the M7 motorway.
Its difficulties include the negative impact of Covid-19 on the construction sector, the significant increase in labour and materials costs, insurance and bonding difficulties, and the onerous conditions placed on those performing civil engineering projects for public bodies in Ireland.
The loss of senior key personnel in recent months also had a negative impact on the companies, the court heard.
The companies within the group had been relying on financial support from its overall parent company, XTA Investments Ltd. The court also heard that the group owes €9.5 million in loans that were obtained from Ulster Bank in recent years.
An application for the appointment of a provisional liquidator to another related firm in the group, SIAC Holdings (Ireland) Ltd, will be made later this month.
The application came before Mr Justice Brian O’Moore who, after being satisfied the companies are insolvent and unable to pay their debts as they fall due, appointed insolvency practitioner Mr David O’Connor of BDO as provisional liquidator to the two companies.
The judge said that it was in the best interests of all relevant parties, and to help ensure an orderly winding-up of the businesses, that a provisional liquidator be appointed.
Mr O’Connor was given various powers, including the power to retain employees and subcontractors working on various projects, including ones in Dublin Cork and Kilkenny.
The provisional liquidator, the judge added, can also secure the group’s assets worth some €11.2 million to ensure there will be no “self-help” by creditors taking stock that belongs to the firms, which he said can occur when construction businesses are wound up.
The judge said he was further noting that the court had been informed that minority shareholders in XTA are considering bringing legal proceedings against that company.
The appointment of Mr O’Connor as provisional liquidator was made by the court following an ex parte hearing before the judge on Wednesday afternoon.
The judge also directed that the firm’s director file a statement of affairs in the next 28 days.
The companies, represented by Kelley Smith SC and Brian Conroy BL, petitioned the court for Mr O’Connor’s appointment.
Counsel said there had been a degree of uncertainty and concerns, about the companies’ ability to pay their debts, expressed by SIAC’s employees and suppliers in recent months.
The companies accept that their inability to pay staff will cause significant upset to them.
Those issues could be best addressed by the appointment of Mr O’Connor, counsel added.
The judge adjourned the case to a date later this month.
