O’Flynn firm sells UK unit

The O’Flynn construction group yesterday confirmed that it has sold its loss-making UK-based firm that provides healthcare accommodation for seniors.

The sale by the Cork-based O’Flynn group of Shelbourne Senior Living Ltd is part of a process reached with Nama in February to dispose of assets and reduce liabilities.

A spokesman for the O’Flynn group yesterday confirmed the sale of SSLL but declined to state to whom the company has been sold and how much was received.

Accounts recently lodged by SSLL to the Companies House in the UK show the firm reduced its losses last year from £3.9m (€4.5m) to £1m after revenues rose from £2m to £2.6m.

Numbers employed by the company increased from 75 to 99. The accounts show that the loss last year included a writedown of £200,000, following a writedown of £2.3m in 2011.

SSLL’s sale coincides with a report that private equity groups Blackstone and Starwood Capital have made approaches to buy €1.5bn in Nama loans linked to the O’Flynn group.

The unsolicited interest from international investment funds is expected to prompt the biggest loan sale to date by the agency.

The group — headed by Michael O’Flynn — counts among its Irish properties the Elysian in Cork City. It also has extensive interests overseas.

A note attached to the SSLL accounts states that in addition to satisfying interest repayment obligations as part of the agreement with Nama, “the facility agreements require that the group progressively reduces its liabilities over an extended period of a number of years through a managed programme of property disposals”.

The accounts state that the repayment dates for the loans range from 2014-18.

The note continues: “The satisfactory implementation of the group’s business plan is dependent on future events and the ongoing satisfactory execution of key commitments attaching to the loan facilities agreed with Nama, which, by extension, results in some material uncertainty regarding the group’s ability to continue as a going concern.

“This uncertainty arises due to the significant deficiency in the group’s net assets and the uncertainty with regard to the market into which properties have to be sold in order to finance debts repayment obligations with Nama.”

The directors state that they believe the group will be in a position to meet the financial and debt repayment commitments attaching to the loan facilities agreed with Nama.