Flynn retains sites after agreeing deal with Blackstone

Builder Michael O'Flynn will keep 500 acres of development sites in Ireland and Britain and his group's commercial project in central Edinburgh in Scotland under the terms of a deal struck with US fund Blackstone that ends a dispute between the pair.

Blackstone bought the O'Flynn group's €1.8 billion debt for €1.1 billion from the National Asset Management Agency last year.

The Cork businessman and a fund subsidiary, Carbon Finance, have been in talks aimed at ending a dispute that blew up last July when the US fund unsuccessfully attempted to place the O'Flynn group in examinership and appoint receivers to a number of its businesses.

Rental income

Under the terms of a deal agreed between the two sides, Carbon will retain properties in Ireland, Britain and elsewhere that are generating rental income.

Amongst the properties it is keeping is the high-rise Elysian Tower in Cork city centre, which is one of the better-known developments completed by the O’Flynn group.

The Irish group will keep development sites in Ireland and Britain. These run to about 500 acres and include residential and commercial development.

The group will also retain its mixed-use site at Haymarket in Edinburgh, Scotland, which is being built by its Tiger Developments subsidiary. The site is in the financial services district of the city.

The business will buy these properties back from Carbon and is expected to raise the finance to do this. Once the deal goes through, it will not have any liabilities to Blackstone or Carbon. They will receive the rental income from the properties that they are taking over.

In a joint statement issued on Friday, the two said they had signed binding heads of agreement under which O’Flynn will acquire the majority of his group’s development assets, most of which are in Ireland, but with some in Britain, while Carbon keeps the rest of the portfolio.

“The parties continue to work collaboratively on transitional arrangements,” the statement said. A “standstill agreement” under which the group was not required to make any repayments against its liabilities will be extended for a further three weeks.

The group was due to repay €235 million to Carbon at the end of last year under the terms of its original loans, but the standstill agreement put that liability on hold.