Builder Manley Construction intends to terminate a number of loss-making contracts after getting High Court protection from creditors to allow the company to restructure.
The High Court has appointed Michael McAteer of Grant Thornton as examiner to Manley Construction, giving it up to three months' protection from creditors while he works on a plan to resolve its current difficulties.
Duleek Co Meath-based Manley ran into problems as rising costs left it with losses on a number of contracts that it had been awarded at fixed prices. It is seeking to terminate these agreements and focus on profitable projects.
The company employs 50 people and has businesses in Ireland and Britain. Its directors are Gabriel Manley, Thomas Manley, Damien Manley and Martina O'Hanlon.
An independent report by accountant Anthony Carey of Cooney Carey shows that if the company were wound up, it would result in a shortfall of close to €9.7 million.
This would leave €1.2 million for creditors, about 10 per cent of what is due to them. Its liabilities include €3.4 million in directors’ loans and a €1.4 million debt due to State assets agency Nama.
The report states that allowing the company to continue trading would be more beneficial for creditors. The firm has €1 million left of the directors’ loans, which will contribute to the cash it needs to stay trading.
Manley ran into difficulty on three projects, Franklin House, an office block in Ballsbridge, Dublin, an extension to Ashbourne College in Ratoath Co Meath for the Department of Education, and work on Nenagh Hospital in Co Tipperary for the Health Services Executive. These could have resulted in losses of almost €2.2 million.
The company has halted work at Nenagh and Ratoath. Contracts for both were agreed with the State bodies in 2015, but the cost of labour and supplies have risen since then as the construction industry expanded.
Difficulties with a subcontractor and unforeseen expenses related to new building regulations hit the Franklin House contract, which Manley also agreed in 2015.
Manley is working on a number of profitable contracts that could result in a €3.7 million gain. These include work at Poolbeg, Dublin, for the National Oil Reserve and social housing for Dún Laoghaire-Rathdown council.