The board of the debt-ridden Irish housebuilding group has written to its shareholders explaining its decision and informing them that it will hold an extraordinary general meeting on July 29 to vote on the matter. The board requires 50% shareholder approval to pass the motion.
In the letter to shareholders, McInerney’s chairman, Ned Sullivan, outlines that the group has "no meaningful assets of worth", no bank facilities and no cash, leaving the board with "no realistic alternative but to propose its liquidation" and cease trading.
He added the directors have exhausted all possible efforts and options to rescue the group and have acted in the best interest of shareholders at all times.
"As there is no longer any remaining equity value for the existing shareholders, and following consultation with our financial and legal advisers, the only realistic option available to your board, at this point, is to propose a voluntary liquidation of the company."
McInerney was placed in temporary examinership last September, owing a consortium of banks (including Bank of Ireland, KBC and Anglo Irish Bank) a combined €113 million.
Elements of its Irish business are currently awaiting a Supreme Court judgment on an appeal against the High Court ruling against a rescue plan for the group tabled by US-based investor group, Oaktree Capital.
The ruling on proposed investment in the McInerney Homes Ltd and McInerney Contracting Ltd subsidiaries will have no real affect on the overall group, however, as the two divisions will either go into receivership or hold no equity interest for their former parent, pending the outcome.
Following its examinership, the McInerney group de-listed from both the Irish and London Stock Exchanges, claiming it wasn’t in a position to meet its obligations as a publicly quoted company.
Earlier this year, McInerney’s British operations were placed in administration and later sold off to Miller Homes. Its Spanish operations had already been sold. Last month, London-based corporate financier, David Nabarro bought the 21.5% stake in the group formerly owned by the Quinn Group, and was linked with a takeover bid and the seeking of a separate EGM to remove the existing board.
McInerney’s board, however, is approaching shareholders with its voluntary liquidation idea as it sees no alternative value deal. It said that, despite its best efforts, it hadn’t been possible to secure any further investment in respect of the group.
How it all unraveled
-November 2009: Announces it’s on the brink of breaching certain bank covenants. McInerney says it is actively looking to dispose of all non-cash generative aspects of the group, as part of a wide-ranging cost cutting exercise.
- April 2010: Begins disposal of Spanish business after board member Barry O’Connor expresses interest.
- July 2010: Raises €45m from US-based investor, Oaktree Capital, and makes restructuring proposal to British and Irish banks.
- August 2010: NAMA instructs banks to withhold credit facilities from McInerney.
- September 2010: Group placed in examinership, with debts of €113m owed to Anglo, BoI and KBC.
- November 2010: De-lists from both Irish and London Stock Exchanges. Board says business isn’t in a position to meet obligations as a publicly quoted company. Group taken out of examinership, but Irish business remains.
- February 2011: High Court rejects — for a second time — rescue plan for the group, tabled by Oaktree Capital.
- March 2011: McInerney appeals High Court decision to the Supreme Court. McInerney’s British operations placed in administration, subsequently being acquired by British firm Miller Homes.
- June 2011: London-based financier, David Nabarro buys the 21.5% stake in McInerney — previously owned by Quinn Group. Interests in Alanda Club Marbella sold to Onagrup.
- July 2011: McInerney board writes to shareholders informing them of its intention to launch voluntary liquidation process.
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