O'Flynn appoints Rothschild to restructure debts

PROPERTY DEVELOPER Michael O’Flynn has appointed investment bank Rothschild to undertake a restructuring of the debts of the O’Flynn Group in a move that could lead to the company eventually exiting Nama.

While the project is at a nascent stage, it is believed a restructuring would involve new private equity or debt financing being brought in to restructure the debt of the overall group company, rather than individual projects.

This could lead to the refinancing of all the O’Flynn Group loans in Nama, effectively allowing the new partners to “buy out” the existing Nama loans, leading to O’Flynn exiting the agency.

Companies in the O’Flynn Group have tapped private equity and other bank financing in the last year, despite the fact some group loans were already in Nama.

Tiger Developments, a subsidiary of the O’Flynn Group operating in the UK, secured private equity backing for a £250 million (€320 million) mixed-use scheme in Edinburgh’s financial district late last year. Similarly, O’Flynn entered a joint-venture deal with US firm Westbrook Partners and Royal Bank of Scotland (RBS) last year to develop a £50 million, 435-bed student building near Wembley Stadium in London.

Under the deal, the new bank debt refinanced original loans from Anglo Irish Bank used to purchase the site near the College of North West London.

Nama effectively gave the green light to both the Edinburgh and Wembley projects. Theoretically, it could support a total refinancing of the O’Flynn group loans if financing was secured.

O’Flynn Construction is one of the country’s largest construction firms, though about 50 per cent of its business is now overseas.

Mr O’Flynn, one of the 17 business people behind the “Blueprint for Ireland’s recovery”, a proposal for economic recovery submitted to the new Government, is also one of the 10 developers whose loans were the first moved into Nama. The developer has been one of the most outspoken critics of the asset-management agency.

Because the O’Flynn Group and subsidiary entities have unlimited status, they are not obliged to file accounts or disclose financial information publicly.