Zoe says rescue could net €290m surplus

THE ZOE group of companies owned by property developer Liam Carroll could emerge with net assets of €290 million if it has time to develop existing sites and sell properties over a three-year period, according to the group’s submissions to the High Court.

Independent accountants hired by Mr Carroll’s property group, which secured court protection last Friday, said that if the companies continued in business, the group would have assets of €1.6 billion to cover €1.35 billion in debts.

A report compiled for Mr Carroll by accountants LHM Casey McGrath, seen by The Irish Times, outlines the full scale of the assets and liabilities within the Zoe Group, which represents a large part of his overall business.

One of the country’s largest developers, Mr Carroll secured the protection of the court for his Zoe Group to prevent the collapse of his wider development business.

Mr Carroll sought court protection after ACCBank threatened to topple his business by liquidating significant trading companies across his group in a bid to recover unpaid loans of €131 million.

Mr Carroll will seek to appoint an examiner in court on Monday to devise a rescue plan for six of his companies in the Zoe Group.

The group’s debts total €1.35 billion, which includes €1.273 billion owing on bank loans and €24.7 million on bank overdrafts and current accounts. Trade creditors are owed €30 million, while other creditors are owed €22.5 million.

The accountants say in their report that, at June 30th, the group had investment properties of €411 million and shares in quoted companies valued at €115 million. In addition, it had completed residential developments of €193 million, projects under development of €251 million and landbanks acquired for future development valued at €546 million.

The properties were valued last December by estate agents CBRE and Hooke McDonald, the report states. The valuations are based on the development of existing sites and the orderly sale of assets over three years.

As a result of the collapse of the property market, Mr Carroll and his management team devised a three-year business plan late last year to ensure the group’s survival. Among measures proposed, the group will sell stakes in Irish public companies, negotiate a two-year moratorium on loan interest payments and continue to employ about 600 staff and contractors.

Mr Carroll has invested in a number of public companies including food company Greencore, ferry group ICG and housebuilder McInerney. These stakes could now be sold to rescue Zoe.

Under the group’s three-year rescue plan, it also proposes to sell development sites with planning and many residential properties through aggressive marketing and competitive pricing.

The court was told on Friday that Zoe faced a deficit of €900 million if it was liquidated and that it could survive, but needed “breathing space” from its debts.

AIB and Bank of Scotland (Ireland) are the group’s largest lenders; their respective debts account for 40.8 per cent and 26.8 per cent of Zoe’s overall liabilities.

The two banks funded a scheme to pay off unsecured creditors this year. Mr Carroll’s group also sold 39 residential units for €11.7 million to help settle creditors’ debts.

Last month ACC threatened to liquidate companies across the group due to the inter-dependency of companies within his business and cross-guarantees. ACC is owed €131 million on its loans and €4.8 million in unpaid interest.

The bank, which is owned by Dutch group Rabobank, warned it would pursue a legal action in Jersey, where Mr Carroll’s holding company Morston Investments is registered, and realise any value by liquidating his other firms. Among the properties secured indirectly against Morston is Gordon House, Google’s Dublin offices.