THE CORK-BASED group controlled by developer John Fleming intends to repay most of its bank loans, which total about €900 million, over five to 10 years under a rescue plan contained in court filings submitted by the group.
Mr Fleming plans to “carve” up the group and “ringfence” the development and landbank parts of the group with bank borrowings of about €788 million, according to a plan devised by accountants PricewaterhouseCoopers (PwC).
The remaining bank loans of about €112 million would be separated out into another division and linked to the group's operating divisions to protect about 650 jobs, according to court submissions seen by The Irish Times.
The development and associated assets of the Fleming Group are expected to be moved under the control of the State’s “bad bank”, the National Asset Management Agency (Nama), as the bulk of the group’s borrowings are to Allied Irish Banks (AIB) and Anglo Irish Bank, which fall under the Nama plan.
Anglo is owed €268 million. AIB is understood to be owed almost €300 million.
Among the businesses remaining within the proposed trading division are the Fota hotel and golf resort in Co Cork, as well as various construction and energy divisions.
On Monday Mr Fleming was successful in his application to the court seeking the appointment of an examiner to one of his companies, Tivway, which owns a partially built 14-storey office block in Sandyford, south Co Dublin.
The appointment of the examiner protects the wider Fleming Group, which owes a total of more than €1 billion. The application had been opposed by ACCBank, which wanted to take control of Tivway by appointing a receiver, threatening the wider group.
The bank, which is owned by Dutch group Rabobank, is trying to recover loans of €21.5 million, which were provided to Tivway to construct the office building in Sandyford. Its efforts to recover its loans are being led by banker Eric Gottenbos, who is in charge of the Irish bank’s “special asset management team”.
In a presentation on a rescue plan made to its banks last May, the group proposed to “reduce the risk of unsecured creditor positions” by reaching a €19.8 million settlement with creditors, which involved them writing off about €3.5 million of their debts.
It was proposed that this would be funded with €8 million from AIB, €4 million from Anglo, €2.4 million from Bank of Scotland (Ireland), €3 million from KBC Bank Ireland, and €2.4 million from ACC. The banks were asked to agree in principle to the rescue plan by May 28th, a week after the restructuring meeting.
The group also sought to reach a “standstill agreement” with each bank until the restructuring was complete and to secure the required funding to make the settlement with the group’s creditors.
ACC issued demands to Tivway on June 3rd seeking loan repayment in full. A week later the bank demanded repayment from two of the main firms in Mr Fleming’s group, John J Fleming Construction and JJ Fleming Holdings, which guaranteed Tivway’s loans.
The Fleming Group operates five businesses: a construction firm; two structural building firms known as Vision Modular and Fusion Building Systems; an energy company, and the Fota Island resort. The group forecasts revenues of €193 million in 2009, €215 million in 2010 and €220 million in 2011 driven by the energy unit, the presentation shows.
It forecasts earnings before interest, tax, depreciation and amortisation of €8.3 million in 2009, €14.2 million in 2010 and €17.2 million in 2011. The group projects overheads of €2.4 million in 2009, €1.65 million in 2010 and €1.65 million in 2011.
