HOUSE BUILDER McInerney is a step closer to a rescue after a majority of its creditors yesterday backed a €48 million restructuring plan for the troubled group.
McInerney’s Irish business has been under the High Court’s protection and in examinership since September. The group owes three banks – Anglo Irish, Bank of Ireland and KBC – €113 million.
At a meeting yesterday, nine out of a total of 16 classes of creditors voted in favour of a rescue plan put forward by examiner Billy O’Riordan of PricewaterhouseCoopers which involves paying the banks €25 million in final settlement of their debt and unsecured creditors 7 per cent of what they are owed.
The vote means Mr O’Riordan can seek High Court approval for the plan, known as a scheme of arrangement. He is due in court next week to seek dates for a full hearing on the issue, which is likely to take place before Christmas.
Unsecured trade creditors voted almost overwhelmingly in favour of the deal – 428 backed it while just 17 opposed it.
The banks, which have been seeking to have McInerney placed in receivership, opposed the scheme. They are likely to ask the High Court to refuse to endorse it on the grounds that they would fare better under receivership.
The plan is based on a €48 million package that US private equity investor Oaktree Capital has put on the table.
Along with the €25 million offer to the banks, it allows for a €2 million payment to creditors other than the banks and 7 per cent to unsecured creditors.
Along with this, Oaktree has pledged to put up €5 million in working capital and to put aside a further €15 million for future investment.
Oaktree originally offered the banks €60 million in reinstated debt, which meant that the original €113 liability would have been replaced by a new €60 million obligation. That would have involved the banks continuing their relationship with the group and providing some fresh funding.
However, the three institutions rejected that offer. When McInerney’s sought the appointment of an examiner, the banks told the High Court that they could get back €90 million of the debt in a “slow burn” receivership.
This has been criticised as the institutions involved have not produced their own figures to back up the argument.
If the High Court agrees that the banks would do better in a receivership, it can refuse to endorse the rescue plan and put McInerney in receivership.
