The High Court has approved a rescue plan for Barryroe Offshore Energy that involves an injection of some €6 million of funding from its main shareholder, businessman Larry Goodman.
Mr Justice Michael Quinn on Friday confirmed the scheme proposed by the oil and gas explorer’s examiner which will mean Mr Goodman’s Lorsden (Jersey) Limited company, based in Jersey, invests €1 million in initial funding, with a further €5 million available upon agreement on an appropriate business plan.
Lorsden is the parent company of Mr Goodman’s Vevan Unlimited vehicle, which last July petitioned for the appointment of an examiner to Barryroe, in which it has a 20 per cent stake.
The court application came just days before shareholders were due to vote on putting the company into liquidation after Minister for the Environment Eamon Ryan in May refused to grant a permit for its key Barryroe oil project off the Cork coast.
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The court heard on Friday that the plan, put together by examiner Kieran Wallace of corporate advisory firm Interpath Ireland, would involve extinguishing the shareholding of some 10,000 members. Their shares were already worthless when the petition for an examiner came to court as the firm was insolvent, said Mr Wallace’s senior counsel, Kelley Smith.
However, the shareholders would receive a 5 per cent return on any potential future proceeds from the Barryroe oilfield, either through a sale or development.
At a recent creditors’ meeting, 65 per cent of the members’ by value voted against the scheme, while the unimpaired Revenue Commissioners, as a preferential creditor, and unsecured creditors, who will receive 70 per cent of their debt, voted in favour, the court heard.
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The Minister for Environment, categorised as a stand-alone class of “decommissioning creditor”, whose “claim is neither quantified nor admitted”, had corresponded with Mr Wallace but did not object to the plan before the court, Ms Smith said. The scheme envisages an expert determination process with engagement from the Minister in relation to its potential claim.
Taking into account the proposed cash injection, including the €5 million that is contingent on the formulation of a business plan, Mr Wallace concluded the company has a reasonable prospect of survival as a going concern.
Ms Smith said the business will shift away from oil and gas exploration towards opportunities in green and renewable energy sectors. The current directors will be replaced on a date to be agreed.
No objections came before the court, although the judge considered correspondence from two shareholders who were opposed to the plan.
The judge was satisfied he should confirm the scheme of arrangement, which will take effect next Wednesday.
