Musgrave flips franchisee loans

There was quite a kerfuffle last September when IBRC suddenly appointed receivers to HCJV, a property company linked to the Caulfield McCarthy retail group, one of the biggest SuperValu franchisees with about eight stores.

Well, it seems SuperValu owner Musgrave has stepped in to help smooth the way for HCJV, which is said to have developed a testy relationship with the bank.

Musgrave has bought out the estimated €80 million of HCJV's property loans owed to IBRC and flipped them on to a company controlled by Anne and Tom Caulfield, who are brother and sister, and their business partner John McCarthy, who is a former Musgrave employee.

The rumour is that Musgrave paid in the region of €30 million for the loans, which were linked to properties, including Caulfield McCarthy’s SuperValu stores in locations such as Cork, Malahide, Enniscorthy and New Ross, as well as a couple of shopping centres owned by the investors.

The supermarket operating companies were unaffected.

As soon as Musgrave sealed the deal with IBRC and the receivers, it sold the loans on for the same consideration to HCJV's parent company, Kenmichael, whose directors include the Caulfields and McCarthy. Kenmichael appears to have bought the loans using a facility from AIB.

It’s all laid out in a mind-bogglingly complicated company filing this week for HCJV, if you can find a lawyer and an accountant to decipher it. So why did HCJV or Kenmichael not just buy out the loans directly from IBRC, if there was cash on the table from AIB?

Relations between the bank and the investors would have been strained by the receivership appointment, which also gave IBRC full control over the rental income from the units rented out by HCJV. But the receivership also brought unwanted and high- profile publicity for the retail group.

The shops, which employ 1,000 staff, continue to trade perfectly well, but Caulfield McCarthy had to issue a public statement on the day of the receivership to reassure suppliers and customers it was “business as usual”.

I wonder if the investors have sent any flowers to Musgrave’s Cork headquarters for the dig-out?