ACC Bank has come to the rescue of the developers behind the Parkside development, with new finance provided and the development company's n40 million debts restructured.
G&L Property Investments, the development company behind the retail and residential development, went into examinership last year after sustaining heavy losses because of the downturn in the property market.
A related company, Portlaoise Construction, was also granted court protection. The company’s examiner, KPMG accountant Kieran Wallace, has now agreed terms with ACC to restructure the group’s debts and to provide new finance.
ACC is owed some n40 million in relation to the Parkside development, but the bank has agreed to advance further funds to pay a dividend to creditors.
The bank has also agreed to provide a further loan to the company, to help it overcome its current financial difficulty. Parkside, which is on the outskirts of Portlaoise, is one of the largest developments ever undertaken in the midlands. It is built on former GAA owned land which was sold for approximately n1million in 2003.
Wallace has circulated a scheme of arrangements to creditors in the past few days, and a series of meetings will take place to allow creditors to vote on the rescue package. If approved, the scheme will then go before the High Court for final ratification. Under the terms of the scheme, preferential creditors will receive 20 per cent of their debts, while unsecured creditors will be paid 8 per cent. Secured creditors will retain their security.
As part of the deal, ACC’s new loan will be secured against the assets of the group. Irish retailer Superquinn is the anchor tenant at Parkside. The development also includes office accommodation, restaurants and apartments.
G&L Property Investments is owned by Michael Lalor and John Grace.
The company has completed the Parkside development, but sustained losses due to the difficulty in closing sales of residential and commercial units at the Parkside shopping centre.
Through Portlaoise Construction, Lalor and Grace have built a number of housing estates and large projects in the midlands.
Speaking to the 'Leinster Express' this week, Mr Grace said the renegotiations with the bank was a positive step, with creditors being paid something. "They are people who have been working with us for a good number of years and have been very loyal. I have a great lot of sympathy for them," he said.
"This is only a small amount but half a loaf is better than none," he said.
Mr Grace pointed out that 75 legally-binding contracts have been signed for the development. He said the apartments were finished last August but when many of these were unoccupied, this, along with the global credit crunch, resulted in their credit flow difficulties. A number of the apartments are now occupied and a number of businesses are also operating there. "They do appreciate, and do need, local support," Mr Grace said.
He added that a negotiations are on-going for a number of other units and a two units are currently being fitted out for a new pharmacy at the Parkside development.
"Both Mick [Lawlor] and myself are working through this examiner process. It is a place we didn't want to be, and we didn't want any of our creditors to be here either," he said.