SIAC in financial trouble

Gryire

Strange to see SIAC Construction in financial trouble after surviving the recession. They seemed to be trading through the period with profits every year.

Peterdalkey

They are in big trouble with major roads contracts in Poland. Their offices at Monastry Road Clondalking are being blockaded by sub-contractor creditors since yesterday morning. The Gardai were there too as I passed to and from the office, yesterday and this morning.

Gryire

Peterdalkey wrote: »

They are in big trouble with major roads contracts in Poland. Their offices at Monastry Road Clondalking are being blockaded by sub-contractor creditors since yesterday morning. The Gardai were there too as I passed to and from the office, yesterday and this morning.

I think they pulled out of Poland a couple of year ago. They have been trading away since then. Just finished a few bridges in Tullamore. Where is the money gone!

Graham

Gryire wrote: »

I think they pulled out of Poland a couple of year ago. They have been trading away since then. Just finished a few bridges in Tullamore. Where is the money gone!

Losses from a Polish €400 million roadbuilding project, which it was forced to cancel earlier this year, are threatening the 100-year-old group’s survival.

Gryire

Graham wrote: »

Losses from a Polish €400 million roadbuilding project, which it was forced to cancel earlier this year, are threatening the 100-year-old group’s survival.

http://www.independent.ie/business/irish/siacs-400m-polish-road-project-goes-nowhere-28827240.html

Graham

http://www.irishtimes.com/business/sectors/commercial-property/siac-to-seek-court-protection-today-1.1569841

Perhaps the financial losses were only realised in the accounts this year. From the link you posted it looks like SIAC weren't the only ones to get stung.

It's very unfortunate for the many many staff and subcontractors who aren't likely to see outstanding debts settled in full. My heart goes out to them, it's an absolutely rotten position they find themselves in through no fault of their own.

Gryire

Graham wrote: »

http://www.irishtimes.com/business/sectors/commercial-property/siac-to-seek-court-protection-today-1.1569841

Perhaps the financial losses were only realised in the accounts this year. From the link you posted it looks like SIAC weren't the only ones to get stung.

It's very unfortunate for the many many staff and subcontractors who aren't likely to see outstanding debts settled in full, my heart goes out to them.

On this article it says that they reported profits of €5million for 2012.

http://www.irishbuildingmagazine.ie/2013/10/22/siac-may-face-examinership-following-polish-losses/

You are right about staff and subcontractors having to take the hit.

Graham

Gryire wrote: »

On this article it says that they reported profits of €5million for 2012.

http://www.irishbuildingmagazine.ie/2013/10/22/siac-may-face-examinership-following-polish-losses/.

Makes it even more likely that the losses from the Polish operation are only just hitting the Irish books.

Gryire

Graham wrote: »

Makes it even more likely that the losses from the Polish operation are only just hitting the Irish books.

Any anticipated losses should have been accounted for in the year they occurred!!!!!!

Is it just the construction arm of the company is affected or will the specialist subcontractors also be affected also.

Graham

Gryire wrote: »

Any anticipated losses should have been accounted for in the year they occurred!!!!!!

Not being an accountant I'm not in a position to confirm that. Other than a note in the Annual Report how would you account for as-yet unknown losses?

Gryire wrote: »

Is it just the construction arm of the company is affected or will the specialist subcontractors also be affected also.

I haven't been privy to any information other than that made available through the media. I think the High Court petition is planned for today, there might be more information available after that.

Peterdalkey

In most examinership cases, much work has been done by accountants to prepare a case to show that the business has a fair chance of surviving, provided certain targets can be achieved. Their submissions normally outline a set of proposals for dealing with secured lenders, creditors etc. There will be much more real infomation later in the day.

dbran

Gryire wrote: »

Any anticipated losses should have been accounted for in the year they occurred!!!!!!

Is it just the construction arm of the company is affected or will the specialist subcontractors also be affected also.

I believe Gryire is correct. Under Irish GAAP, if a long term project is expected to result in an overall loss then the entire expected loss should be provided for immediately and not spread out over the remaining life of the project. A large company like SIAC should have been able to anticipate this loss well in advance.

I wonder who the auditors were?

dbran

Graham

dbran wrote: »

I believe Gryire is correct. Under Irish GAAP, if a long term project is expected to result in an overall loss then the entire expected loss should be provided for immediately and not spread out over the remaining life of the project. A large company like SIAC should have been able to anticipate this loss well in advance.

I wonder who the auditors were?

dbran

KPMG according to the Irish Times Top 1000 unless they changed in 2012.

At what point does a potential loss cross over the line to being an expected loss?

Yes this point occurred to me also about 2012's accounts. Obviously it comes down to the FD convincing the auditors about whether or not the loss was definitely going to happen or not in a particular year. The semantics of accounting standards can be "open to interpretation" as many cases have shown.

This would affect remunerations in the organisation also so definitely in the interest of the recipient of those remunerations to have it recognised later rather than sooner.

Graham

glasso wrote: »

This would affect remunerations in the organisation also so definitely in the interest of the recipient of those remunerations to have it recognised later rather than sooner.

It could also be buying time to try and save the company from examinership/receivership which can't ultimately be anyones preferred outcome.

Gryire

Graham wrote: »

It could also be buying time to try and save the company from examinership/receivership which can't ultimately be anyones preferred outcome.

I wondor is their pension fund paid up! Could the creditors be trying to get acces to those funds.

Graham

How would the creditors access a pension fund? Surely if there is money in the pension fund, it stays there?

Gryire

Graham wrote: »

How would the creditors access a pension fund? Surely if there is money in the pension fund, it stays there?

I think it is an asset that would be lumped with all other assets in the event of liquidation.

Gryire

Gryire wrote: »

I think it is an asset that would be lumped with all other assets in the event of liquidation.

afaik defined contribution plans are pretty safe but defined benefit plans are different and the people already retired take precedence and it depends on the current state of the fund for defined benefit (i.e. in deficit or not).

Graham

Gryire wrote: »

I think it is an asset that would be lumped with all other assets in the event of liquidation.

That's some fairly heavy duty scaremongering for something you think might be.

The assets of your pension plan are totally separate from the assets of the company. In most cases, if a company goes into liquidation, the company pension plan will be 'wound up'. The trustees of the pension plan are responsible for winding up the pension plan, according to the rules of the plan and current law.
http://www.irishlife.ie/faq/is-my-pension-protected-if-my-company-goes-into-liquidation.html

That's not to say pensioners (current or future) won't be effected but it does appear to indicate that creditors have no call over the existing pension fund.

Gryire

Examinership secured.

Debts of €100Million.

Atlantic Dawn

Sad to see, they completed some major projects across this country and beyond...

http://www.siac.ie/siac/index.jsp?b=0&pID=93&nID=101

onedmc

Gryire wrote: »

I wondor is their pension fund paid up! Could the creditors be trying to get acces to those funds.

It's been know for some time that siac was in trouble and that the pension is also underfunded.

Gryire

Atlantic Dawn wrote: »

Sad to see, they completed some major projects across this country and beyond...

http://www.siac.ie/siac/index.jsp?b=0&pID=93&nID=101

There is no reason why they can't get over this and move on.

Gryire

Gryire wrote: »

There is no reason why they can't get over this and move on.

yes most likely the company will survive but at a heavy or fatal cost to several other companies in Ireland who had the misfortune to be subcontractors of Siac.

Gryire

glasso wrote: »

yes most likely the company will survive but at a heavy or fatal cost to several other companies in Ireland who had the misfortune to be subcontractors of Siac.

Papers say that the banks are taking a neutral position. This is a change from what the times said on Tuesday when it said the banks were supporting the company's case. SIAC need some creditors to support them.

Peterdalkey

The appointment of the examiner is only an interim measure by the courts, they have to come back to court on November 6th to seek to have it confirmed or it could be rejected. It appears that at least some of the trade creditors intend opposing the examinership. As the banks are most likely secured, they can afford to see what emerges and then choose the option that offers them the best outcome. With €100M in debts, it is hard to see a good outcome either way for the unsecured creditors, unless there is a huge collectable cash pot in the company's own debtors ledger.

see that Siac has removed list of directors from it's website.

http://www.siac.ie/siac/index.jsp?b=0-93&pID=98&nID=107

Gryire

glasso wrote: »

see that Siac has removed list of directors from it's website.

http://www.siac.ie/siac/index.jsp?b=0-93&pID=98&nID=107

There has been a few changes in these in the last 12 months.

Gryire

Gryire wrote: »

There has been a few changes in these in the last 12 months.

that doesn't make any difference. It's deliberate that nothing is up there for a list of directors. it would take 5 mins to update a list with changes.

Graham

glasso wrote: »

that doesn't make any difference. It's deliberate that nothing is up there for a list of directors. it would take 5 mins to update a list with changes.

In fairness, I'd imagine updating the website is fairly low on the list of priorities at the moment.