AN INDEPENDENT accountant’s report for Fate Park Ltd, the Galway-based fuel distribution group owned by John Sweeney, highlights the extent the financial difficulties facing the company.
According to the report, which was compiled by company auditor Michael McEvoy, €17.3 million was owed to creditors on April 25th, just before the company was placed into examinership.
Oil giant Esso is the biggest creditor, being owed €12.5 million while Topaz is owed €3.8 million.
The report says Fate Park has “extensive borrowings” of €26 million. In the eight months up the date of the report, Fate Park had “difficulty discharging its debts”. Fate Park has 65 trucks, operates out of 11 depots in the west and northwest of Ireland and delivers more than 220 million litres of oil a year.
The underlying business appears to trade profitably. In the 12 months to the end of February 2009, Fate Park had earnings before interest, tax, depreciation and amortisation of €3.8 million on turnover of €170.9 million.
Its revenue more than doubled over the past five years, while its Ebitda also increased steadily.
The report suggests that Fate Park’s problems relate more to the funds it extended to other companies controlled by Sweeney, who is a large shareholder in the Shelbourne Hotel in Dublin and has other hotels interests.
Fate Park is a subsidiary of Blackshore Holdings Limited, another Sweeney company, and it “extended credit” of more than €20 million to this group. This was basically fuel supplied to 14 filling stations. “Recovery of this sum is unlikely in the present economic and credit environment,” the report states.
It also gave a guarantee to AIB relating to borrowings by Blackshore for €6.3 million, which has been called in by the bank.
On the plus side, Fate Park’s assets include land with a book value of €5.4 million and equipment with a value of €3 million. An attempt was made to sell the business to Cork businessman Des Hurley, who runs East Cork Oil, but the deal fell through. Hurley put €5 million into the business in late January via a company called Nire Oil Ltd and is a secured creditor.
AIB is also listed as a secured creditor and is owed €19.3 million. Fate Park’s examiner Billy O’Riordan has been left to piece together a rescue for the business. Several offers have been received with Reihills’ Tedcastles oil group, believed to be heading the list.
A clearer picture should emerge at the end of June.
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