FOOD COMPANY Greencore is working with stockbrokers to achieve an orderly placing of Liam Carroll’s 29.5 per cent stake with new and existing institutional investors if the beleaguered developer’s shares come to the market.
No formal placing process is in train given uncertainty about the outcome of Mr Carroll’s new application for an examinership of his Zoe group companies, which will be heard in the High Court tomorrow.
However, Ulster Bank’s move to exercise security over the 15.9 per cent of Greencore that Mr Carroll owns has intensified expectation that his entire stake will soon come on the market.
While Greencore has made no public comment on the issue, market participants say the firm and brokers working for it have informally sounded out current and potential investors about a potential placing.
Renewed uncertainty about the ultimate destination of the stake sent Greencore shares as low as €1.20 on Dublin market yesterday but the stock closed unchanged last night at €1.27.
Mr Carroll had been preparing to sell off his Greencore shares as part of a plan to rescue his struggling property empire. Two days ago, however, the market was told that Ulster has exercised powers that enable it to block any sale of the 15.9 per cent stake.
Mr Carroll cannot use his voting rights over these shares and Ulster also has the power to issue instructions to him in respect of these voting rights.
Market participants believe that Ulster will ultimately take full ownership of all Mr Carroll’s Greencore stake before exercising its right to sell the entire holding.
In the very near future, however, its next move is expected to be an exercise of security over the remainder of Mr Carroll’s stake in the company. These shares were not affected by its first exercise of security as they are held by corporate entities that are not within the Zoe group of companies. The first exercise of security by Ulster, which is owned by Royal Bank of Scotland, was executed last Friday. Late on Friday night, Mr Carroll went to the High Court with a new application for an examinership of the Zoe firms.
The hearing tomorrow follows the Supreme Court’s refusal last week to overturn the High Court’s rejection of his original application for an examinership.
Mr Carroll’s legal team has already indicated to the court that it will provide letters of support from lenders to the Zoe group with the exception of ACC. The lenders are: AIB, Bank of Scotland (Ireland), KBC Bank Ireland and Bank of Ireland. The nationalised Anglo Irish Bank also had no objection to Mr Carroll’s new application. While Ulster supported Mr Carroll’s original application for an examinership, the court heard last Friday night that it has adopted a “neutral” stance in relation to the new proceedings.
Mr Carroll’s lawyers are also expected to introduce detailed valuation reports from estate agents CBRE and Hooke MacDonald on the future prospects for the properties held by the Zoe companies. Mr Carroll bought 21.57 per cent of Greencore from financier Dermot Desmond for €170 million in 2006. His stake was valued at €302.38 million after he increased it to 29.5 per cent in 2007. It is currently valued at €67.90 million.
Greencore has told the market that improving sentiment in Britain will help it report an operating profit for the year to September that will exceed its performance last year.
