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SIAC in financial trouble

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    #122
    pedroeibar1
    Closed Accounts Posts: 5,108 ✭✭✭pedroeibar1


    Naux wrote: »
    I hope the judge got someone independent to look over the pricing of said impressive list of projects. There was major below cost tendering in the market on major projects in recent years.

    It would be interesting to know the timing of when SIAC won the jobs that are on the list of future projects.
    Good comment. During the boom years in Ireland credit control and pricing went out the window; nowhere was this more evident than in the construction sector. While its costs increased significantly and its revenues grew by about 6% every year, the industry became more reliant on volume growth than price increases. Too many companies (and I include subbies in this) supplied /did work without checking the creditworthiness of their customers. Too many companies tendered for contracts without proper pricing, ignoring the fact that a small delay would lead to significant price overruns. Too many companies invested in plant and equipment without thinking about a possible downturn. The price surge in input costs in 2004 (particularly steel and energy) was not factored in. Then the days of ‘Shur it’ll be grand, we can get it back on renegotiation at the back end’ ended, they were over for good and the careless got screwed. In a nutshell, too many people had their collective heads in a dark place.
    Naux wrote: »
    Does that mean that they lost all the projects that they had won but not started before going into examinership? I would doubt it.
    How else could examinership be viable? No work that they could immediately start on after "agreeing" reductions/write offs with unsecured creditors and exiting examinership? Viable on the basis that they may/may not win future projects??
    Having heard the Examiner’s comments, those of the Company and all members/ creditors attending the hearing and who addressed the Court either to support or object to the Proposals, the Court may (a) confirm the Proposals, (b) confirm them subject to modification(s) or (c) refuse to confirm them. Examinership has already been described by a Court as to “…enable, in an appropriate case, an enterprise to continue in existence for the benefit of the economy as a whole and, of equal, or indeed greater, importance to enable as many as possible of the jobs which may be at stake in such enterprise to be maintained for the benefit of the community in which the relevant employment is located…

    It’s down to the Court to decide if the criteria necessary for suvival and exiting examinership have been or are likely to be met. There has been a 25 year period to gain experience on Examinerships, so the Commercial Court judges usually ask the right questions.


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    #123
    Gryire
    Registered Users Posts: 250 ✭✭Gryire


    Axe being wielded. Half of the 220 jobs that were supposed to be saved by new investment are gone.


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    #124
    Gryire
    Registered Users Posts: 250 ✭✭Gryire


    Interesting article in Independent today re examinership saving 400 jobs including 219 at SIAC. There are only 100 hobs left of the 219 that were 'saved'

    http://www.independent.ie/business/over-400-jobs-saved-through-examinership-process-30141112.html

    http://www.irishtimes.com/business/sectors/manufacturing/siac-uk-subsidiary-seeks-protection-from-creditors-1.1686883


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    #125
    pedroeibar1
    Closed Accounts Posts: 5,108 ✭✭✭pedroeibar1


    So what's the issue? Jobs were saved, the business kept going, the shareholders took a bath and some of the creditors took a hit. That's what happens in an examinership.


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    #126
    Gryire
    Registered Users Posts: 250 ✭✭Gryire


    pedroeibar1 wrote: »
    So what's the issue? Jobs were saved, the business kept going, the shareholders took a bath and some of the creditors took a hit. That's what happens in an examinership.

    I agree with that but why claim 219 when the real figure was 100. It is the examiner who is claiming to have saved 219 jobs.


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    #127
    pedroeibar1
    Closed Accounts Posts: 5,108 ✭✭✭pedroeibar1


    Frequently a survival plan put forward by an examiner is predicated on certain events happening (e.g. 'Ibelieve that the company is well place to obtain X contract, but if not we will reduce the workforce by Y, which will allow the business to continue to trade viably'.) The courts will take a pragmatic approach and allow for this. I implied situation in #122 above. Generally the Examinership process has been successful in Ireland, it was brought in during 1990 by Dessie O'Malley to save Larry Goodman's AIBP, and they have recovered and are bigger than ever, so it is not all doom and gloom.


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    #128
    Gryire
    Registered Users Posts: 250 ✭✭Gryire


    pedroeibar1 wrote: »
    Frequently a survival plan put forward by an examiner is predicated on certain events happening (e.g. 'Ibelieve that the company is well place to obtain X contract, but if not we will reduce the workforce by Y, which will allow the business to continue to trade viably'.) The courts will take a pragmatic approach and allow for this. I implied situation in #122 above. Generally the Examinership process has been successful in Ireland, it was brought in during 1990 by Dessie O'Malley to save Larry Goodman's AIBP, and they have recovered and are bigger than ever, so it is not all doom and gloom.

    The jobs that were lost at SIAC had nothing to do with this. 75 jobs went in their UK steel factory on 13th Feb. The court were told about the other 40 during the examinerhip process. I think the date of the court case was 25th Feb!


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    #129
    pedroeibar1
    Closed Accounts Posts: 5,108 ✭✭✭pedroeibar1


    I cannot get a grip on where you are coming from on this topic. Siac is a group of interconnected companies, it had financial problems as a result of the downturn here. A serious problem developed in Poland and the group had to restructure, so jobs went. It had one or two companies that would be viable after a work-out so it needed Court protection. There is a defined allowable period which must be adhered to and to exit examinership the Examiner must show viability of the plan and invariably to become viable an axe has to be wielded on shareholders, investors, staff, creditors, etc. Some more jobs went. That is what Examinership is about. Are you saying that the Examiner 'misled' the Court? Are you basing your remarks on the 'accuracy' of a report in the Indo? What's your point?:confused:


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    #130
    Peterdalkey
    Closed Accounts Posts: 2,091 ✭✭✭Peterdalkey


    Examinership is about saving the company not the jobs, whatever employment is needed to sustain the actual business going forward are what will be maintained. In the construction sector, job numbers in any company can vary greatly inline with contract/workload. I can understand how employees and those close to them may hold a different view but this is the commercial reality.


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    #131
    Gryire
    Registered Users Posts: 250 ✭✭Gryire


    pedroeibar1 wrote: »
    I cannot get a grip on where you are coming from on this topic. Siac is a group of interconnected companies, it had financial problems as a result of the downturn here. A serious problem developed in Poland and the group had to restructure, so jobs went. It had one or two companies that would be viable after a work-out so it needed Court protection. There is a defined allowable period which must be adhered to and to exit examinership the Examiner must show viability of the plan and invariably to become viable an axe has to be wielded on shareholders, investors, staff, creditors, etc. Some more jobs went. That is what Examinership is about. Are you saying that the Examiner 'misled' the Court? Are you basing your remarks on the 'accuracy' of a report in the Indo? What's your point?:confused:

    This is the headline from the paper:
    'Examinership process saves more than 400 jobs in first three months'

    In the report is says 219 are at SIAC This is incorrect and lazy journalism. Why can't a journalist check their figures before going to print or is the headline meant to parise the Examinership process, either way it would be better if facts were used instead of fiction.


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    #132
    pedroeibar1
    Closed Accounts Posts: 5,108 ✭✭✭pedroeibar1


    Peterdalkey wrote: »
    Examinership is about saving the company not the jobs, whatever employment is needed to sustain the actual business going forward are what will be maintained. In the construction sector, job numbers in any company can vary greatly inline with contract/workload. I can understand how employees and those close to them may hold a different view but this is the commercial reality.

    The courts take a greater view - roughly speaking the result is the 'moral' difference between examinership and a receivership, as I posted earlier (emphasis added)
    pedroeibar1 wrote: »
    Examinership has already been described by a Court as to “…enable, in an appropriate case, an enterprise to continue in existence for the benefit of the economy as a whole and, of equal, or indeed greater, importance to enable as many as possible of the jobs which may be at stake in such enterprise to be maintained for the benefit of the community in which the relevant employment is located….
    Gryire wrote: »
    This is the headline from the paper:
    'Examinership process saves more than 400 jobs in first three months'
    In the report is says 219 are at SIAC This is incorrect and lazy journalism. Why can't a journalist check their figures before going to print or is the headline meant to parise the Examinership process, either way it would be better if facts were used instead of fiction.

    Nothing whatsoever to do with SIAC; anyway, when did the Indo ever bother with decent business reportage (or accuracy)?


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    #133
    Peterdalkey
    Closed Accounts Posts: 2,091 ✭✭✭Peterdalkey


    The acid test is that real financial and commercial stability of the enterprise going forward is envisaged by appointed accountant, the rest is just politically correct claptrap and waffle.


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    #134
    pedroeibar1
    Closed Accounts Posts: 5,108 ✭✭✭pedroeibar1


    Peterdalkey wrote: »
    The acid test is that real financial and commercial stability of the enterprise going forward is envisaged by appointed accountant, the rest is just politically correct claptrap and waffle.

    Not quite. It is what the High Court judge envisages that counts.

    Initially the Judge has to be convinced that the company has a future, and that is assessed on an independent accountant’s report which is part of the initial examinership request documentation. That report is scrutinized by the court and not infrequently an ‘independent accountant’ has been jumped on for relying on figures presented by the company without testing them, or for valuations that were viewed as unrealistic or too old, or on projections that the court viewed as unrealistic.

    If satisfied, the judge then appoints an examiner and sets a timeframe (tightly controlled by the Act) in which to put forward a plan. The Examiner then returns to court to get the Judge’s approval of the plan, which again could lead to a yes/no decision.

    Also, there is no stipulation in the Act that the Examiner be an accountant, but usually he/she is an insolvency practitioner. Political correctness, claptrap and waffle do not enter into the process, other than from uninformed juornalists.


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    #135
    Naux
    Registered Users Posts: 335 ✭✭Naux


    pedroeibar1 wrote: »
    I cannot get a grip on where you are coming from on this topic. Siac is a group of interconnected companies, it had financial problems as a result of the downturn here. A serious problem developed in Poland and the group had to restructure, so jobs went. It had one or two companies that would be viable after a work-out so it needed Court protection. There is a defined allowable period which must be adhered to and to exit examinership the Examiner must show viability of the plan and invariably to become viable an axe has to be wielded on shareholders, investors, staff, creditors, etc. Some more jobs went. That is what Examinership is about. Are you saying that the Examiner 'misled' the Court? Are you basing your remarks on the 'accuracy' of a report in the Indo? What's your point?:confused:

    I think there were major problems in Ireland also due to suicidal pricing in recent years. Everyone is concentrating on Poland but I think that if someone looked into the behaviour of the company leading up to examinership it would be interesting.


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    #136
    Naux
    Registered Users Posts: 335 ✭✭Naux


    pedroeibar1 wrote: »
    So what's the issue? Jobs were saved, the business kept going, the shareholders took a bath and some of the creditors took a hit. That's what happens in an examinership.

    I assume that in the examinership the potential for jobs being saved may have been overly optimistic? Would that have helped the examinership to go through?

    If you can believe the reported figures in the press the examiners proposals/projections were out by >50%:eek:


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    #137
    pedroeibar1
    Closed Accounts Posts: 5,108 ✭✭✭pedroeibar1


    Naux wrote: »
    I think there were major problems in Ireland also due to suicidal pricing in recent years. Everyone is concentrating on Poland but I think that if someone looked into the behaviour of the company leading up to examinership it would be interesting.
    Same thing could be said about 99% of Irish construction companies, as I said in my opening paragraph here. Two things: (i) pricing of contracts – that does not really concern an Examiner if a firm is not locked into current/future jobs at bad prices (ii) desperate times can cloud or sway a decision, so a firm will take on a contract that is break-even or even slightly less just to maintain cash-flow. Not something an examiner would be greatly interested in. If there had been ‘misbehaviour’ going on, it is quite separate to an examinership process and is a matter for the ODCE to investigate.
    Naux wrote: »
    I assume that in the examinership the potential for jobs being saved may have been overly optimistic? Would that have helped the examinership to go through? If you can believe the reported figures in the press the examiners proposals/projections were out by >50%

    Your choice of wording suggests something that is not relevant to the examinership process. Its purpose is not to ‘get through', or rescue directors, banks, shareholders or investors. Its role is to save jobs and/or an important economic interest. That is why I countered the remark by another poster on ‘politically correct claptrap & waffle’. The examiner is appointed by the court and reports to the court; it is not in his interest to be overly optimistic or ‘help’ an examinership go through. Actually it might be more profitable for an examiner to fail as such, as he would be well placed to convert to a liquidator and earn more fees, rather than walking with just the fee for the examinership.)

    As for job numbers, I know nothing about the SIAC case, but I would expect to see a comment in the report of the Independant Accountant and in the examiner's final report on the viability of job numbers henceforth being predicated on various factors e.g. ‘In the event that the company is not selected from its shortlisted and favoured position for XYZ contract, there will be another review of employment numbers and a reduction will most likely be necessary should the company fail to obtain replacement work. See revised figures in appendix abc’.


    I hope everything works out, it is not a good time for anyone to look for a job in construction at the moment.


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    #138
    Naux
    Registered Users Posts: 335 ✭✭Naux


    pedroeibar1 wrote: »
    Same thing could be said about 99% of Irish construction companies, as I said in my opening paragraph here. Two things: (i) pricing of contracts – that does not really concern an Examiner if a firm is not locked into current/future jobs at bad prices (ii) desperate times can cloud or sway a decision, so a firm will take on a contract that is break-even or even slightly less just to maintain cash-flow. Not something an examiner would be greatly interested in. If there had been ‘misbehaviour’ going on, it is quite separate to an examinership process and is a matter for the ODCE to investigate.

    I'd say that the ODCE has a fairly full caseload at the moment:P............ not that there will be any/many meaningful prosecutions from any of it. May as well be Snow White and the 7 dwarves investigating anything!!
    pedroeibar1 wrote: »
    Your choice of wording suggests something that is not relevant to the examinership process. Its purpose is not to ‘get through', or rescue directors, banks, shareholders or investors. Its role is to save jobs and/or an important economic interest. That is why I countered the remark by another poster on ‘politically correct claptrap & waffle’. The examiner is appointed by the court and reports to the court; it is not in his interest to be overly optimistic or ‘help’ an examinership go through. Actually it might be more profitable for an examiner to fail as such, as he would be well placed to convert to a liquidator and earn more fees, rather than walking with just the fee for the examinership.)

    Senior commercial managers/Quantity surveyors would never be able to fool an accountant.......
    pedroeibar1 wrote: »
    As for job numbers, I know nothing about the SIAC case, but I would expect to see a comment in the report of the Independant Accountant and in the examiner's final report on the viability of job numbers henceforth being predicated on various factors e.g. ‘In the event that the company is not selected from its shortlisted and favoured position for XYZ contract, there will be another review of employment numbers and a reduction will most likely be necessary should the company fail to obtain replacement work. See revised figures in appendix abc’.


    I hope everything works out, it is not a good time for anyone to look for a job in construction at the moment.

    Hope the jobs are saved and sanity returns to the pricing of jobs.


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    #139
    Peterdalkey
    Closed Accounts Posts: 2,091 ✭✭✭Peterdalkey


    The bottom line remains, if the numbers don't add up, the pig don't fly. All the rest is largely aspirational and desirable. Post Examinership, much can change as the actual market realities emerge for each enterprise.
    I note that former 2009 Examinership case " Buy and Sell" has just gone into liquidation.


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