TWO KEY companies in the Fleming construction group look set to be placed under High Court protection to facilitate further investment in the troubled business.
The High Court appointed an examiner to one of the Fleming group companies, Tivway, last July, after ACCBank sought the repayment of €21.5 million in loans to the business. The Fleming group’s overall property development business has debts of over €1 billion.
The move gave Tivway protection from its creditors and a breathing space of up to 100 days while the examiner put together a rescue plan – known as a scheme of arrangement – for the company.
Yesterday, Tivway’s examiner, George Maloney of accounting firm Baker Tilly Ryan Glennon, asked the High Court to extend the examinership process to a further two related companies.
Ms Justice Maureen Clark extended the examinership to John J Fleming Construction Company and JJ Fleming Holdings.
However, the proceedings were adjourned to September 14th to allow Mr Maloney inform other creditors, and to give them an opportunity to be heard.
Bernard Dunleavy BL, told the court that the examiner had succeeded in attracting investment and working capital for the company. But in order to incorporate this in a scheme of arrangement the examiner, Mr Maloney, required protection of the court for the two additional companies of the group.
He said the original appointment of the examiner had been resisted only by ACCBank; other major creditors had favoured examinership.
At the hearing at which the High Court originally appointed Mr Maloney, it heard that there were individuals with cash available to invest in the company. Details of this were disclosed in private, as the information was considered commercially sensitive.
Also at the hearing last July, it emerged that, along with the €21.5 million owed to ACCBank, Tivway owes State-owned Anglo Irish Bank €268 million. John J Fleming Construction Company and JJ Fleming Holdings have provided security for both debts.
At the time, the court agreed that examinership was the least unpalatable of options. Winding up Tivway in an attempt to realise the debt would have had a knock-on effect on the business as a whole and its 650 staff.
The Fleming group bought Tivway in 2006. The company’s main assets are two sites in Sandyford, Co Dublin – one known as the “Aldi site”, the other as the Sentinel building, which is an unfinished development consisting largely of apartments.
These form the Rockbrook development in Sandyford, which is on an 11.3 acre site in the area for which Tivway paid €245 million in 2006, as the property and housing markets were nearing their peak.
Part of the group’s proposed rescue plan includes a number of proposals for the tower building at Rockbrook, namely outright sale, sale on partial completion and sale on completion to landlord specifications.
ACC was to have funded the completion of the tower structure, but withdrew its support for the project in March and sought repayment of its loan.
Dutch institution Rabobank owns ACC, and its Irish subsidiary has been pursuing a number of developers for repayment of loans secured on properties.
Its attempts to secure repayment of a €136 million loan from Liam Carroll’s Zoe Group prompted Mr Carroll, one of the country’s biggest developers, to apply to be placed in examinership. The High Court heard Zoe’s second bid for protection earlier this week, but has yet to rule on it.
Mr Fleming began his construction business in Cork in 1975. The company has worked on projects across industry, energy and pharmaceuticals, and earned a strong reputation for the quality of its work. Its more high-profile projects include three hotels, Inchydoney in west Cork, the Radisson in Limerick and the Sheraton hotel on Fota Island.
