The Supreme Court has cleared the way for implementation of a survival scheme for key companies of construction giant Siac employing 219 people after today, dismissing a challenge by the Polish Roads Authority (PRA) to the scheme.
The PRA, which claims to be owed up to € 70m by Siac, had urged the Supreme Court to approve changes to the scheme to take into account its claim.
Its application, made after the High Court earlier this month approved the scheme, was strongly resisted by Siac, its examiner, creditor banks and a group of investors whose investment of € 10.5m was described as essential to the survival of the companies and the jobs of 219 employees. The High Court placed a stay on the scheme coming into effect pending the PRA appeal.
The three judge Supreme Court told a packed court this afternoon it would dismiss the PRA appeal. Mr Justice Nial Fennelly, sitting with Ms Justice Mary Laffoy and Ms Justice Elizabeth Dunne, said it would give its reasons later.
The survival proposals involve a € 10.5m investment in the company, with about € 5m going to secured banker creditors - Bank of Ireland, Bank of Scotland and KBC Bank, owed some € 42m. The companies have 1,255 creditors and most of those will get between 5 to 10 per cent of what they are owed.
About € 2m of the € 10.5m is being allocated for working capital while the costs of the examinership will be between € 400,000 to € 500,000.
The examiner, Michael McAteer, said he was satisfied the scheme would place the companies on a sound commercial footing.
The PRA, a State authority, argued it was unfairly prejudiced and would get nothing under the scheme despite paying out millions to some Polish creditors of Siac. The PRA and Siac are involved in substantial litigation in Poland arising from SIAC's 2012 termination of a contract for road projects there.
Earlier today, Bill Shipsey SC, for the PRA, agreed its appeal came late in the day but said the intention was to look after the interests of the Polish taxpayer.
The PRA was claiming some € 42m, plus € 7m interest, in litigation in Poland over the July 2012 termination of the Siac contract, he said.
The PRA also claimed it was entitled to recognition in the scheme of its claim for € 20m arising from payments it had made to Polish creditors of Siac.
John O’Donnell SC, for the investors, said they simply had no more money to put in and it was vital for the survival of Siac the original scheme be approved.
Siac’s fate was “on tenterhooks” and the investors were very concerned the PRA’s proposed modification of the scheme would irrevocably alienate suppliers, on whose goodwill the future of Siac depended.
There are wages to be paid on Friday and it is vital the court give its view on the appeal as soon as possible, counsel urged.
The only alternative to the scheme was liquidation and the PRA appeared to have adopted something of “a dog in the manger” attitude.
James Doherty, for the examiner, said, if this appeal was about protecting the Polish taxpayer, the PRA should have been in the matter from the outset and had also failed to produce evidence to support its claims concerning what it is owed.
The PRA could not be regarded as in the same position as supplier and sub-contractor creditors of Siac and there was already value for some of its claim as the PRA had a road and bridges and some €35m of finished works, he said.
“That may not be much use if they don’t go anywhere,” Ms Justice Dunne remarked. The PRA had contracted for the entire works and “not a bit here and there”, she added.
Brian Kennedy SC, for Siac, said there was fundamental unfairness in the PRA’s application and the lack of evidence advanced by it put SIAC at a major disadvantage in answering its claims.
