McInerney close to cash injection

HOUSEBUILDER McInerney Holdings said yesterday it is at an advanced stage of securing a major capital injection for the troubled group to prevent it going into receivership.

The statement follows weekend reports that a group of lenders, led by Bank of Ireland, were considering the appointment of a receiver. The group owes €236m, of which €111m is due to Bank of Ireland,Anglo Irish Bank and KBC Ireland.

It is understood that a recapitalisation deal is close to completion and looks to be 90% certain at this stage, sources close to the deal said.

The investment is US and British-based and has emerged after a period of talks with a number of groups.

In a statement yesterday McInerney said the overall restructuring was at an advanced stage and involves “a leading international equity partner regarding a substantial injection of new capital”.

Talks have been ongoing since April 2010 and due diligence has been continuing for the past two months, and at one point involved a number of potential investors.

Goldman Sachs, whobecame advisers to McInerney in March 2010, have been involved in the refinancing talks with the unidentified third party.

Shortly after Goldman came on board McInerney’s chief executive, Barry O’Connor, expressed an interest in buying the group’s Spanish preparations as part of any restructuring deal.

He has stepped down as managing director of the company, pending developments, but remains on the board.

McInerney’s British operations are said not to be under any real threat where restructuring talks are also under way.

McInerney employs atotal of 400 people in its core markets and has been struggling since the property bubble burst.

It has posted big losses in the past two years and took a hit of €156m on its Irish land bank last year after the book value of the asset was cut in half.

Its share price has slumped and is currently trading at between 5 and 6 cent.