O’Flynn Construction offers to pay up to €400m to Blackstone

Amount is €175m above sum Irish group was due to repay to US investor by end of year

Michael O’Flynn: his group faces further repayment deadlines but the next date for a large repayment is believed not to be until 2018. Photograph: Collins

Michael O’Flynn: his group faces further repayment deadlines but the next date for a large repayment is believed not to be until 2018. Photograph: Collins


The O’Flynn Construction group, led by Cork property developer Michael O’Flynn, has submitted a plan to pay up to €400 million to US private equity giant Blackstone by December 31st.

O’Flynn Construction was due to repay Blackstone €225 million by the end of this year under the terms of its loans. The US investor acquired these from the State in May using a subsidiary called Carbon Finance for €1.1 billion – a €700 million discount from their face-value.

Directors of O’Flynn told Blackstone they had full-funded purchasers lined up to acquire assets within the group in the UK and Ireland which would more than meet their year-end obligations.

The group still faces further repayment deadlines but the next large repayment date is believed not to be until 2018.


Blackstone has responded with a series of questions to the repayment proposal. It is understood not to have indicated whether it is prepared to accept the O’Flynn offer.

Neither Blackstone nor Michael O’Flynn responded to requests for comment. A spokesman for O’Flynn Construction said: “I can confirm that the group plans to repay the monies due by December 31st.”

A note in a report by auditors PricewaterhouseCoopers to the members of O’Flynn Construction, which has recently been filed with the Companies Registration Office, states that its directors have “engaged” with Blackstone.

The auditors state “the directors have been engaging with Carbon, at the time of approving the financial statements, on a proposed strategy to meet its loan repayment obligations”. They add that if this does not happen, it “could impact on the ability of the group to continue as a going concern”.

The accounts, which Blackstone had previously complained had not been filed, are not qualified and do not say the group is insolvent. They do note that it is a “going concern” because of various matters. These matters include an ongoing legal battle with Blackstone, which has seen the investment giant unsuccessfully try to seize control of the group and remove Michael O’Flynn and his fellow directors from running it.

In his legal action to prevent the loss of his empire, Mr O’Flynn has accused Blackstone of being engaged in a “very elaborate and sophisticated, but ultimately hamfisted, blitzkrieg” to take over his companies. This is denied by Blackstone.

‘Arguable case’

Mr Justice Brian McGovern described Mr O’Flynn and his companies of having a “good arguable case” in initial hearings about whether he was entitled to take an action against Blackstone.

A note to O’Flynn Construction Holdings auditors’ report, dated October 17th, also states that the group’s facility agreements include financial covenants that relate to “preservation of net rental income levels and complying with loan to value covenants”.

The report states: “The directors have concluded that the group is in compliance with these financial covenants at the date of approval of the financial statements and forecast that the group will continue to remain in compliance for the foreseeable future.”

The O’Flynn property empire is controlled by more than 80 companies, some of which are unlimited and others of which are based outside Ireland, meaning it does not have to publicly disclose detailed financial information.