Bank of Ireland facing significant haircut on Keenan loans

Bank of Ireland could be facing heavy losses on loans to feed machinery firm Keenan Systems, which was put into receivership last week.

The Co Carlow-based company, which employs 222, has debts of nearly €14 million, including €7 million with Bank of Ireland.

Directors sought the protection of the courts last week after discussions with a potential investor collapsed.

The company, which makes diet feeders and mixer wagons, has been under financial pressure because of the downturn in commodity prices, which has put a squeeze on farmers’ incomes.

Receivers Kieran Wallace and Cormac O'Connor of KPMG are now negotiating a possible sale of the business to US animal nutrition group Alltech, with €40 million reported as the asking price.

While terms of the proposed deal have not been finalised, it is likely to involve a significant haircut for the company’s creditors.

The receivers said they were confident the Alltech talks would lead to a successful conclusion, which would preserve the 222 jobs.

The US firm is understood to see the potential for synergies across its own business from a tie-up with Keenan.