THE VALUE of McInerney Homes’ properties has fallen sharply since it first sought High Court protection from its creditors last August.
Mr Justice Frank Clarke yesterday said he would rule on Monday on whether to keep the group under the court’s protection and leave examiner, Billy O’Riordan, of PricewaterhouseCoopers in place.
The initial 70-day period for an examinership is up, but the group has applied for a 30-day extension to allow the examiner time to put together a rescue plan and put it to creditors. The plan is based around new investment from US-based private equity group, Oaktree Capital, which is buying into the group for €40 million. At least €10 million of this has been earmarked for Irish operations.
It emerged yesterday that a recent assessment of the group’s Irish land bank by property dealers, Lisney, values it at €20 million, €25 million or €30 million, depending on whether it is sold in one lot or several and the period of time over which it is sold.
In August, when the company first sought court protection, an independent accountant’s report estimated that the property could realise a net figure of just over €40 million.
The judge pointed out yesterday that the fall in value since that time was significant. It is understood that the value of the property has dropped because of economic uncertainty.
A syndicate of three banks, Anglo Irish, Bank of Ireland and KBC, to which McInerney owes €115 million, wants the group placed in receivership.
The banks believe that they could recover up to €90 million over a period of years if this were to happen, but say they would recover less from whatever scheme the examiner is proposing. His plan would involve Oaktree buying out the banks at around €60 million.
The syndicate’s senior counsel, Rossa Fanning, argued yesterday that McInerney has moved the goalposts several times since it applied for protection and argued the rescue plan that is now likely to be put on the table is very different from what was envisaged in August.
If the judge grants the extension, Mr O’Riordan will finish putting together the rescue scheme and will call a creditors’ meeting for November 17th.
