ULSTER BANK has moved to block any sale by property developer Liam Carroll of over half his 29.5 per cent stake in food group Greencore.
The manoeuvre by Ulster, owned by Royal Bank of Scotland, comes ahead of a crucial High Court hearing on Thursday at which Mr Carroll will make a new application for an examinership of his Zoe group companies.
The survival plan for which Mr Carroll has sought court protection includes the disposal of equity positions he holds. In addition to his 29.5 per cent stake in Greencore, he also owns 29.2 per cent of ferry operator Irish Continental.
Mr Carroll invested in Greencore in 2006 when he spent €170 million buying up the 21.57 per cent stake held for years by financier Dermot Desmond. His Greencore stake was valued at €302.38 million after he increased his stake to 29.5 per cent in 2007. Falling more than 37 per cent in the last 12 months alone, the stake had a value of €67.90 million last night.
The move by Ulster involves its exercising of security over 15.9 per cent of Greencore held by Mr Carroll.
It means he will not be able to use his voting rights over these shares and the bank will also have the power to issue instructions to him in respect of those voting rights.
The court action on Thursday follows the Supreme Court’s refusal last week to overturn the High Court’s rejection of his original application for an examinership.
Ulster supported the original application but the High Court heard last Friday night that Ulster has adopted a “neutral” stance in relation to the new proceedings.
Mr Carroll, one of the biggest and most successful developers in the boom years, has been struggling to keep his business intact since ACCBank sought repayment of €136 million in loans. ACCBank, owned by Dutch lender Rabobank, secured the appointment of a provisional liquidator to two of his companies and receivers after the Supreme Court ruling.
The High Court heard last Friday night that Mr Carroll had been hospitalised and was not in a position to give instructions in the new application.
However, Zoe directors David Torpey and John Pope had passed resolutions approving the new application.
The Zoe group, with debts of €1.2 billion, has received support from Allied Irish Banks, Bank of Scotland (Ireland), KBC Bank Ireland, Bank of Ireland and Anglo Irish Bank when seeking court protection from its creditors.
Solicitors Matheson Ormsby Prentice said in a stock market filing yesterday that Ulster acquired rights over a 15.9 per cent shareholding in Greencore. The filing, which said the rights were acquired last Friday, prompted a drop of almost 6 per cent in Greencore shares.
“The beneficial holder of the shares shall not be entitled to exercise the voting rights in respect of the shares otherwise than in accordance with the written instructions of Ulster Bank Ireland Ltd,” the filing said.
Although the filing did not name Mr Carroll or any of his companies as the ultimate owner of the 15.9 per cent Greencore stake, it was immediately interpreted in high-level banking and stockbroking circles as a reference to him.
No other Greencore shareholder has a stake exceeding 11.7 per cent and a series of Companies Office filings in 2006 and 2007 show that Ulster financed Mr Carroll’s acquisition of shares in the company. Greencore declined to comment and Ulster Bank declined to comment.
It also emerged yesterday that ACCBank threatened to liquidate 10 subsidiaries of two insolvent companies in the Zoe group. Repayment demand letters sent by ACCBank to Vantive Holdings and Morston Investments said the subsidiaries were debtors of the two companies in March 2008.