Wednesday, December 16, 2009

Cosy consensus in the south exposed once again by our Orange neighbours


Consensus is a word thats often associated with Holland. Apparently in that country everything is about consensus and having everyone agreeing before they act. Its somewhat ironic then that it falls once again to a Dutch company to expose and thwart the cosy consensus in the south.

The Fleming group is a Cork based construction and development interest that has debts of up to 1,000,000,000 euro, 260 million of which is owed to Anglo Irish bank and 21.5 million to ACC.

It turns out that the company's survival plan was universally acclaimed by all its creditors with the exception of the foreign company - ACC, who took this to the Supreme Court.

ACC had claimed there was no evidence Anglo Irish Bank, Bank of Scotland Ireland or Allied Irish Banks will provide the working capital required to save the group.

But defence is claiming that Anglo had taken a commercial decision to support the plan. As part of the scheme it has committed a total of €2m, €1.6m of which would go towards paying the group's unsecured creditors and for other fees it has incurred.

So Anglo, which is a state bank ie we own it, is going to pay out 2 million as part of the plan to save the Fleming group. Now that might be all well and good but so much trust has been eroded the mind tends toward suspicion instinctively.

ACC think the same believing that the rescue plan is a "personalised NAMA" where the banks would sell off the properties over a period of ten years. ACC believed that the plan went "beyond the margins of examinership" and should be rejected.

So maybe ACC is annoyed because they dont like doing business in tents on the basis of where you play golf or maybe they just think the plan sucks. Turns out ACC loaned a cool €22m to a Fleming group company for construction of the Sentinel building in Sandyford, Dublin which is currently "a shell" that ACC prices at about €500,000 to €1m. Bit of a write down that. No wonder ACC are peed off.

They are also peed of because they are not a NAMA company. They are unfortunately outside looking in. Alot like the rest of us then.

But should we listen to ACC or are they just begrudgers who would be feasting like the rest if they could. Well they probably would but ACC has already done some service to the southern state when it challenged the plan for Liam Carroll’s Zoe Group over debts of €136 million. Zoe owed owed €1.35 billion, including €1.27 billion to banks. Zoe wanted an examiner appoined and 100 days to sort its stuff out. This was supported by by AIB, Bank of Ireland and Bank of Scotland Ireland. Anglo Irish Bank & Ulster Bank lodged no objection. The only dissenters to this cosy consensus was ACC. Zoe group were found to have withheld evidence from the court and their application was booted out by a disgusted court which believed there was a deliberate attempt to disrupt the court process.

Talking about the case 'Justice Frank Clarke said the prospects for survival of the group after a two-year moratorium on interest rates expires in 2011 were “significantly improbable”, “at the further ends of optimism” and dependent on the “virtual impossibility” of a benign climate concerning interest rates, property values and letting capabilities.'

Yet despite the Zoe rescue plan being "flawed", "ïmprobable" and my favourite "at the further ends of optimism" it was accepted by all the Irish banks except the Dutch ACC who ensured it was booted out by a disgusted judge.

Is this Fleming case another example. Who knows but I am more likely to listen to ACC than the NAMA banks.

ACC used to be the Agricultural Credit Corporation before it was sold off by the state in 2002. It made a positive contribution to the southern economy while it was a state bank. Certainly more of a contribution than our current state bank - Anglo Irish. Calls for a state investment bank should be acted on. At least ACC is still making a positive contribution to the south even if is now foreign owned.

At least they, like the people of southern Ireland, are outside looking in.

Breaking news link

2 comments:

  1. A Chara, you seen these?

    http://www.youtube.com/watch?v=esHwu_2LVCw

    http://www.youtube.com/watch?v=q0nE_IcKvq0


    Hope you job sorts out, all the best and Happy Christmas to you and yours:)

    ReplyDelete
  2. good links.

    this one is a classic:
    http://audioserver.todayfm.com/audio/breakfast/Gift_oireachtas.mp3

    gift grub does the gogarty

    ReplyDelete