International Securities Trading Corp Plc (ISTC) said today an interim examiner had been appointed protecting the Irish specialist lender from creditors and allowing it time to negotiate with them.
Earlier this month, ISTC fell victim of the crisis in the structured investment vehicle (SIV) market, postponing its results and suspending "grey market" trade in its shares.
The Dublin-based company, which also cancelled a convertible bond issue, said in November it expected to take a one-off charge of at least €70 million euros as it revalues $305 million worth of SIV capital notes it holds.
ISTC statement
ISTC said in a statement its management had been in discussions with its creditors including bankers over restructuring the company's funding arrangements.
"ISTC has today been granted court protection from all creditors through the process of examinership," it said.
"The process of examinership in Ireland provides a standstill period of time whereby creditors cannot pursue claims against the company."
ISTC, which specialises in bank capital lending, was founded in 2005 by managing director Tiernan O Mahoney, a former chief operating officer at Anglo Irish Bank.
The group has said market conditions in the banking sector were some of the most difficult and challenging of the past 30 years.
Earlier this month, media reports said some of ISTC's key banks were aiming to sell assets they held as collateral in ISTC after the company announced the writedown of at least 70 million euros.
ISTC said it will continue to negotiate with creditors during the examinership process.
"The board is of the strong view that the preservation of value for ISTC is best served by ISTC continuing to trade," it said.
ISTC said any liquidation would result in a disposal of its assets in an "extremely illiquid market" with a limited number of buyers.
"Such a forced asset sale would ensure substantial value destruction for all creditors and shareholders Clearly, it is not in the best interests of any creditor to sell assets in such depressed market conditions."