SIAC in financial trouble

Crimson King · 25-10-2013 12:18pm

Sad to hear.

I sub-contracted in their IT Dept a few years back and I found them a great bunch to work for. Some sound people in there and I wish them all the best. To be fair, they were under serious financial constraints even back then once the civil work started to dry up for them in the domestic market, there was always going to be financial pressures. I hope the business survives and peoples jobs/ pensions are not affected.

Graham · 25-10-2013 12:22pm

Peterdalkey wrote: »

They are making a claim of €113m. That is alot different to being owed €113m. ???
Bottom line is that they have run out of cash......... thus insolvent! Insolvency and profitability are not the same thing, it is quite possible to be profitable but insolvent. It is also illegal to trade while insolvent but not so while merely unprofitable.

Thanks Peter, I too had missed that:

On Wednesday, the Siac group secured interim examinership in the High Court. Directors said their difficulties stemmed from the Irish downturn and outstanding payments of about €113 million from its Polish activities.

http://www.irishtimes.com/business/sectors/commercial-property/road-works-in-poland-lead-to-dead-end-for-siac-and-sisk-1.1572124

Gryire · 25-10-2013 1:09pm

Graham wrote: »

Thanks Peter, I too had missed that:

On Wednesday, the Siac group secured interim examinership in the High Court. Directors said their difficulties stemmed from the Irish downturn and outstanding payments of about €113 million from its Polish activities.

http://www.irishtimes.com/business/sectors/commercial-property/road-works-in-poland-lead-to-dead-end-for-siac-and-sisk-1.1572124

On Thursdays Exmainer it was a claim and on Friday's Times it is money owed!

http://www.irishexaminer.com/business/siac-secures-protection-of-court-247332.html

Graham · 25-10-2013 1:16pm

Gryire wrote: »

On Thursdays Exmainer it was a claim and on Friday's Times it is money owed!

http://www.irishexaminer.com/business/siac-secures-protection-of-court-247332.html

All the more reason to exercise restraint before rushing to judgement and brandishing the pitchforks.

Gryire · 25-10-2013 2:13pm

Graham wrote: »

All the more reason to exercise restraint before rushing to judgement and brandishing the pitchforks.

There is no judgement or pitch forks just some legitimate queries.

Poland is definitely a big problem for the construction arm, but what about the other parts of the company that are also included.

Graham · 27-10-2013 10:29am

More information is trickling out this morning from the KPMG report. Some of the main points:

shareholders in SIAC sold their stake in the M4/M6 toll road in Ireland for €17m and rather than pocketing the money, ploughed it back into keeping the SIAC business going in 2012 and 2013.

KPMG's report also reveals how badly SIAC was burned by Poland, where it was part of a consortium which won a €365m deal to build a new road known as A4 from the Polish Roads Authority. It shows how SIAC was faced with huge difficulties in dealing with its Polish partner PBG even before it went bust in June 2012.

SIAC was due to be repaid €21m from a bond designed to protect them from such difficulties, but the Irish company was unable to collect this.

SIAC was involved in five different claims totalling €210m in Poland ranging from €87m in contractual claims to €42m in a termination penalty claim. "It is anticipated that [SIAC's] share of the total claims to be pursued will be well in excess of €100m," KPMG said, but warned it was not "likely", any of these claims would be "resolved in the short term".
http://www.independent.ie/business/irish/creditors-would-face-126m-hit-by-liquidating-siac-29702812.html

From what has come out so far, there's no evidence of anything underhand on the part of SIAC

Gryire · 27-10-2013 10:43am

Graham wrote: »

More information is trickling out this morning from the KPMG report. Some of the main points:

shareholders in SIAC sold their stake in the M4/M6 toll road in Ireland for €17m and rather than pocketing the money, ploughed it back into keeping the SIAC business going in 2012 and 2013.

KPMG's report also reveals how badly SIAC was burned by Poland, where it was part of a consortium which won a €365m deal to build a new road known as A4 from the Polish Roads Authority. It shows how SIAC was faced with huge difficulties in dealing with its Polish partner PBG even before it went bust in June 2012.

SIAC was due to be repaid €21m from a bond designed to protect them from such difficulties, but the Irish company was unable to collect this.

SIAC was involved in five different claims totalling €210m in Poland ranging from €87m in contractual claims to €42m in a termination penalty claim. "It is anticipated that [SIAC's] share of the total claims to be pursued will be well in excess of €100m," KPMG said, but warned it was not "likely", any of these claims would be "resolved in the short term".
http://www.independent.ie/business/irish/creditors-would-face-126m-hit-by-liquidating-siac-29702812.html

From what has come out so far, there's no evidence of anything underhand on the part of SIAC

Based on this it could prove very difficult to get out of the hole they are in. How are they likely to move forward.

Graham · 27-10-2013 10:56am

Gryire wrote: »

Based on this it could prove very difficult to get out of the hole they are in.

Do you have anything upon which you've based that comment?

KPMG believe SIAC has a reasonable prospect of survival if it is allowed to restructure.

A note in KPMG's report states that: "Existing shareholders are also willing to contribute further funds should a scheme of arrangement be successful.

If the company was liquidated it would wipe out creditors to the tune of €126million compared to its current net asset position of €37million.

Gryire · 27-10-2013 11:31am

Graham wrote: »

Do you have anything upon which you've based that comment?

KPMG believe SIAC has a reasonable prospect of survival if it is allowed to restructure.

A note in KPMG's report states that: "Existing shareholders are also willing to contribute further funds should a scheme of arrangement be successful.

If the company was liquidated it would wipe out creditors to the tune of €126million compared to its current net asset position of €37million.

How do you think they can survive with assets of €35m and creditors of €100. Do you think creditors are going to settle for some small percentage. What restructuring can they do if they have already shut down non profitmaking arms of the group.

The J Stands for Jay · 27-10-2013 11:45am

Gryire wrote: »

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

Pensions are not a company asset. They are held.under trust and would not be available to creditors in a liquidation.

kkelliher · 27-10-2013 11:47am

Gryire wrote: »

How do you think they can survive with assets of €35m and creditors of €100. Do you think creditors are going to settle for some small percentage. What restructuring can they do if they have already shut down non profitmaking arms of the group.

Because thats how the system works. In most cases creditors will settle for 10% of something when they could otherwise have 100% of nothing

Graham · 27-10-2013 11:56am

Gryire wrote: »

How do you think they can survive with assets of €35m and creditors of €100. Do you think creditors are going to settle for some small percentage. What restructuring can they do if they have already shut down non profitmaking arms of the group.

Can I ask what is your interest in SIAC that compels you to look for the absolute most negative in every piece of information that comes out?

There is also:

SIAC was involved in five different claims totalling €210m in Poland ranging from €87m in contractual claims to €42m in a termination penalty claim. "It is anticipated that [SIAC's] share of the total claims to be pursued will be well in excess of €100m," KPMG said, but warned it was not "likely", any of these claims would be "resolved in the short term".

Accountants - does a net asset position of €37million mean there is €37million remaining after all liabilities have been taken into account?

Gryire · 27-10-2013 11:58am

kkelliher wrote: »

Because thats how the system works. In most cases creditors will settle for 10% of something when they could otherwise have 100% of nothing

So what you are saying that the whole process is about screwing the creditors and move on. Will the banks go for that and will other companies try the same option.

kkelliher · 27-10-2013 12:35pm

Gryire wrote: »

So what you are saying that the whole process is about screwing the creditors and move on. Will the banks go for that and will other companies try the same option.

Do you not read the papers and listen to the news on a daily basis as this is exactly what is happening. recent examples are b&q, superquinn, home base. There does of course have to be a prospect of survival.

Gryire · 27-10-2013 12:40pm

Graham wrote: »

Can I ask what is your interest in SIAC that compels you to look for the absolute most negative in every piece of information that comes out?

Just looking for the truth. Know a few people who are owed money by SIAC. The company have made profits every year through the recession. I am not an accountant but would like to know how much the shareholders have taking out of the company in the last 10 years.

Graham · 27-10-2013 12:43pm

Gryire wrote: »

Just looking for the truth. Know a few people who are owed money by SIAC. The company have made profits every year through the recession. I am not an accountant but would like to know how much the shareholders have taking out of the company in the last 10 years.

I'd also be interested to know how much shareholders have put into the company over the last few years. Perhaps that's just me, I'd rather see both sides of the equation.

The KPMG report also shows that shareholders in SIAC sold their stake in the M4/M6 toll road in Ireland for €17m and rather than pocketing the money, ploughed it back into keeping the SIAC business going in 2012 and 2013.

You appear to be looking for anything that might remotely support the conclusion you have already leapt to.

tipptom · 27-10-2013 1:23pm

Graham wrote: »

I'd also be interested to know how much shareholders have put into the company over the last few years. Perhaps that's just me, I'd rather see both sides of the equation.

The KPMG report also shows that shareholders in SIAC sold their stake in the M4/M6 toll road in Ireland for €17m and rather than pocketing the money, ploughed it back into keeping the SIAC business going in 2012 and 2013.

You appear to be looking for anything that might remotely support the conclusion you have already leapt to.

What is your interest in Siac,you don't appear to have any sympathy for the havoc they have put upon small contactors and their familys for the last six months stringing them along,promising them the money was coming all the time so they could get even more free ongoing work out of them and then go running to the protection of the examiner to protect them when they have exhausted them to breaking point.

Have you any idea how this affects small contractor's and their wives and children and their extended familys that they have probably borrowed money of to keep things going on the promise of money that there was never a chance of coming,but you just want to attack anybody who questions their business dealings in the last six months for some reason.

Gryire · 27-10-2013 1:31pm

Graham wrote: »

I'd also be interested to know how much shareholders have put into the company over the last few years. Perhaps that's just me, I'd rather see both sides of the equation.

The KPMG report also shows that shareholders in SIAC sold their stake in the M4/M6 toll road in Ireland for €17m and rather than pocketing the money, ploughed it back into keeping the SIAC business going in 2012 and 2013.

You appear to be looking for anything that might remotely support the conclusion you have already leapt to.

Haven't 'leapt' to any conclusion but am concerned that as Kkelliher pointed out, alot of companies are using examinership to 'dump' on creditors and then move on leaving a trail of damage behind them.

When SIAC sold their stake in the M4/M6 the money would be paid into the company bank account. Surely it is right and proper that this money should be used to pay creditors rather than get 'pocketed' by the shareholders.

I agree 100% with your comment about liking to know both sides of the equation for monies in and monies taking out.

I would like to see SIAC remain in business and keep providing employment but have seeing a lot of small companies / suppliers being put out of buisness by bigger companies.

kkelliher · 27-10-2013 1:50pm

Gryire wrote: »

Haven't 'leapt' to any conclusion but am concerned that as Kkelliher pointed out, alot of companies are using examinership to 'dump' on creditors and then move on leaving a trail of damage behind them.

When SIAC sold their stake in the M4/M6 the money would be paid into the company bank account. Surely it is right and proper that this money should be used to pay creditors rather than get 'pocketed' by the shareholders.

I agree 100% with your comment about liking to know both sides of the equation for monies in and monies taking out.

I would like to see SIAC remain in business and keep providing employment but have seeing a lot of small companies / suppliers being put out of buisness by bigger companies.

To be fair at no stage have i suggested that siac are looking to dump on their creditors. They are using the laws of the land to protect their business and the rights and wrongs of the system are for another discussion. In respect to their creditors, subcontracting has always being a very high risk relationship and the sooner the construction contracts act is enacted the better. It should at least reduce the exposure of subbies to main contractors and prevent rollup debt.

Graham · 27-10-2013 1:53pm

Did SIAC have a stake in the M4/M6?

kkelliher · 27-10-2013 2:00pm

Graham wrote: »

Did SIAC have a stake in the M4/M6?

They were part if a consortium who designed built and operate it but based on the kpmg report they appear to have sold their stake

consortium is called eurolink

Graham · 27-10-2013 2:51pm

tipptom wrote: »

What is your interest in Siac,you don't appear to have any sympathy for the havoc they have put upon small contactors and their familys for the last six months stringing them along,promising them the money was coming all the time so they could get even more free ongoing work out of them and then go running to the protection of the examiner to protect them when they have exhausted them to breaking point.

I do not have, and never have had any connection with SIAC (financial or otherwise) and I have enormous sympathy for all involved. That extends to SIAC, the subcontractors their respective employees and families.

What I do support is a calm, rational and methodical exploration of all of the options currently available to ensure the continued existence of SIAC and its subcontractors.

As for running for the protection of the examiner, the alternative would have been much much worse for everyone involved.

Gryire · 27-10-2013 3:15pm

Graham wrote: »

I do not have, and never have had any connection with SIAC (financial or otherwise) and I have enormous sympathy for all involved. That extends to SIAC, the subcontractors their respective employees and families.

What I do support is a calm, rational and methodical exploration of all of the options currently available to ensure the continued existence of SIAC and its subcontractors.

As for running for the protection of the examiner, the alternative would have been much much worse for everyone involved.

I hope you are right but I fear that subbies will get burnt. I hope I am wrong. It would be great if it could be sorted and everybody could keep trading.

tipptom · 27-10-2013 5:58pm

Graham wrote: »

I do not have, and never have had any connection with SIAC (financial or otherwise) and I have enormous sympathy for all involved. That extends to SIAC, the subcontractors their respective employees and families.

What I do support is a calm, rational and methodical exploration of all of the options currently available to ensure the continued existence of SIAC and its subcontractors.

As for running for the protection of the examiner, the alternative would have been much much worse for everyone involved.

Fair enough,but I have seen these situations before and been in compounds that have been blockaded and calm it certainly is not and the most anger at the main contractor is at being strung along for ages and pretending that money was imminent and giving out more work to them to compound their losses,so at least this bill coming up something good from the Seaned

06-11-2013 5:53pm

Was the court hearing held today as scheduled?

Graham · 06-11-2013 5:57pm

Yes, looks like the ongoing examinership is being supported and several potential investors have come forward.

Gryire · 06-11-2013 6:01pm

Graham wrote: »

Yes, looks like the ongoing examinership is being supported and several potential investors have come forward.

That is good news. Hope the sub-contractors get sorted.

07-11-2013 1:22pm

Gryire wrote: »

That is good news. Hope the sub-contractors get sorted.

There is for sure going to be a haircut on what's owed for them unfortunately. The question will be how many c on the euro the unsecured creditors (sub-contractors are unsecured creditors) get....

gordongekko · 07-11-2013 1:44pm

I'm just using round figures. Lets say €50 million gets written off during this process and siac are successful with their polish claims and are awarded €50 million do siac get to keep the €50 million or will the sub contractors who lost out have a claim on that money?

Gryire · 07-11-2013 1:59pm

gordongekko wrote: »

I'm just using round figures. Lets say €50 million gets written off during this process and siac are successful with their polish claims and are awarded €50 million do siac get to keep the €50 million or will the sub contractors who lost out have a claim on that money?

I think SIAC get to keep the money. The banks are the only ones who may get access as they are secured creditors.

I know of an employee who is owed redundancy money, is he an unsecured creditor?

Gryire · 07-11-2013 1:59pm

gordongekko wrote: »

I'm just using round figures. Lets say €50 million gets written off during this process and siac are successful with their polish claims and are awarded €50 million do siac get to keep the €50 million or will the sub contractors who lost out have a claim on that money?

I think SIAC get to keep the money. The banks are the only ones who may get access as they are secured creditors.

I know of an employee who is owed redundancy money, is he an unsecured creditor?

Graham · 07-11-2013 2:06pm

Secured creditors are likely to get paid first but that doesn't necessarily mean they will be the only ones to get paid.

Personally, I wouldn't like to speculate as to what happens to any funds that may result from successful legal proceedings in Poland as any such speculation would be completely uninformed guesswork on my part.

I think statutory redundancy should be protected regardless of any outcome.

Gryire · 07-11-2013 2:16pm

Graham wrote: »

Secured creditors are likely to get paid first but that doesn't necessarily mean they will be the only ones to get paid.

Personally, I wouldn't like to speculate as to what happens to any funds that may result from successful legal proceedings in Poland as any such speculation would be completely uninformed guesswork on my part.

I think statutory redundancy should be protected regardless of any outcome.

Statutory redundancy is protected as the government would pay it if the company failed. It is the agreed ex-gratia amount that is in jepordy.

07-11-2013 3:54pm

The settlement of any legal proceedings concerning the Polish issue may not happen or may happen years in the future, long after the examinership is over.

Unfortunately what will happen now is that the unsecured creditors will be taken for a bath.

Whether or not the unsecured creditors can have a contingent claim on future proceeds of Polish court cases I'm not sure but again, that could be way in future, or indeed nothing may ever be reclaimed.

Gryire · 12-11-2013 9:32pm

SEVEN IN RACE TO BUY SIAC - There are seven credible interested parties in the race to acquire the construction firm, SIAC, through the examinership process, according to people familiar with the situation. The bidders will be required to inject between €5m-€8m into the firm, says the Irish Examiner. All seven potential bidders have the financial resources to make the investment, according the sources. It is believed that all parties involved in the examinership process are trying to get a deal in place before the Christmas break. However, the prospects of agreeing a deal before this deadline are seen at about 50:50, according to sources. The 100-year-old construction firm was forced to apply for examinership on October 23 following a number of years of difficult trading conditions in the Irish market and heavy losses incurred through road building projects in Poland that ran into legal trouble.

Gryire · 15-11-2013 4:17pm

Only 5-8m neeed to exit examinership!

www.independent.ie/business/irish/family-behind-siac-construction-firm-calls-in-investec-to-prepare-rescue-bid-29752979.html

Gryire · 16-01-2014 7:59pm

More news on SIAC

http://www.irishtimes.com/business/sectors/commercial-property/french-led-consortium-set-to-take-over-building-group-siac-1.1656642

Gryire · 13-02-2014 4:37pm

Creditors getting 10cent in the Euro. There will be a lot of pi#~@d off creditors.

scwazrh · 13-02-2014 10:53pm

Its better than 0cent in the euro

Stavros Murphy · 13-02-2014 10:58pm

scwazrh wrote: »

Its better than 0cent in the euro

Not if you spent 70c to hopefully earn €1. In that case, 10c is as much use as 0.

Gryire · 13-02-2014 11:11pm

scwazrh wrote: »

Its better than 0cent in the euro

If you were owed €50k and you got €5k and the company that owed you the money goes about its business as normal! You think this is ok!

Graham · 14-02-2014 8:45am

Unfortunately examinership rarely ends with happy creditors, it's usually a case of finding the least bad option from a list of bad alternatives.

In a related subject, Lech Witecki, was dismissed yesterday as the head of the Polish National Roads authority GDDKiA. Mr Witecki has been blamed by several major construction groups for showing a lack of flexibility which has lead to a number of lawsuits for part EU funded motorway projects. Siac, Sisk, Roadbridge, Strabag, Alpine Bau, Bilfinger, and Spain’s Ferrovial are all pursuing legal action.

Gryire · 14-02-2014 9:57am

Graham wrote: »

Unfortunately examinership rarely ends with happy creditors, it's usually a case of finding the least bad option from a list of bad alternatives.

I suppose it is a reflection of the society we live in. A company can write off 90% of it debt and continue on paying themselves big salaries etc. If it was a private mortgage the person who owed the money would get screed until they are bankrupt.

Graham · 14-02-2014 10:12am

Gryire wrote: »

I suppose it is a reflection of the society we live in. A company can write off 90% of it debt and continue on paying themselves big salaries etc. If it was a private mortgage the person who owed the money would get screed until they are bankrupt.

What's your source for the big salaries, I don't see that mentioned anywhere.

Gryire · 14-02-2014 1:36pm

Graham wrote: »

What's your source for the big salaries, I don't see that mentioned anywhere.

They always were very good payers. No pay cuts announced so far.

Gryire · 14-02-2014 1:42pm

Graham wrote: »

What's your source for the big salaries, I don't see that mentioned anywhere.

They always were very good payers. No pay cuts announced so far.

Graham · 14-02-2014 1:44pm

Gryire wrote: »

They always were very good payers. No pay cuts announced so far.

So no facts then?

Gryire · 14-02-2014 3:35pm

No pay cuts announced - fact

Graham · 14-02-2014 3:39pm

No salaries announced either, that must mean they're not getting paid at all by your logic.

Peterdalkey · 14-02-2014 3:45pm

This would never happen in North Korea... !

SIAC in financial trouble

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