Company building Loreto goes into examinership
The High Court has appointed a interim examiner to the building contractor behind the construction of the Loreto Wexford which has gotten into financial difficulties due to the 'devastating collapse' of the one of the UK's largest construction firms Carillion
At the High Court last Thursday Mr Justice Robert Haughton appointed Michael McAteer of Grant Thornton Ireland to Sammon Contracting Group and related companies Sammon Contracting Ireland Ltd and Miceál Sammon Woodcraft Ltd.
The Judge said while the firms were insolvent he was satisfied to appoint Mr McAteer on the basis an independent expert's report had stated the companies have a reasonable prospect of surviving if certain steps are taken.
These steps include the examiner putting together an agreement scheme of arrangement with the group's creditors. If that scheme is approved by the High Court it will allow the group continue to trade as a going concern,
The group, which employs more than 216 people was hired by an entity that included Carillion to build several education facilities in Ireland.
These include the construction of Loreto College in Wexford, Tyndall College Campus in Carlow, Eureka Secondary School in Kells, Co Meath and Coláiste Ráithín and St Philomena's National School which are both in Bray Co Wicklow.
Other separate projects the group is working on include the Maynooth Educational Campus which the court heard is the largest school contract in the history of the State. It is also working housing developments in Waterford and Dublin.
Seeking Mr McAteer's appointment barrister Ross Gorman Bl for the group said it was hired to build five schools and the institute for education by an SPV that included Carillion known as 'Inspired Spaces.'
That contract was worth approximately €87m to the group, counsel said. His client was paid on a monthly basis after works commenced in 2016. However the collapse of Carillion with debts of over £1.5Bn STG has had 'a devastating and immediate impact' on the companies, counsel said.
Payments from the SPV to the Sammon companies ceased last December, counsel said. As a result the group has been unable to pay its suppliers and subcontractors working on those projects.
Counsel said that in addition the fallout from Carillion's collapse in January had 'contaminated the entire group and the other projects it is working'.
The sub contractors and suppliers have made demands for payment, and one creditor has applied to have one of the firms in the group wound up, counsel said.
In addition there has been no activity on any of the sites where the company had been carrying out works on behalf of the SPV involving Carrillion.
However it is confident that it an examiner is appointed, and a scheme approved, the group will be in a position to complete its contracts on time and return to profitability.
The group has also had discussions with PJ and Mary McGrath of the McGrath Group, which has indicated it will provide support and funding to the Sammon firms during the period of protection.
Counsel said that going forward the group, which has a good record, is also confident that it will obtain contracts for projects in the future.
The case was adjourned to April 16 and the Judge also directed that the group's main creditors and Revenue be put on notice of the hearing.