Brothers’ shock at ‘an aggressive, unexpected’ move

A high-wire property development and finance rollercoaster ride continues for O’Flynn Construction.

Founded in Cork in 1978, it now boasts major assets and sites in Cork, Dublin, the UK and Europe.

Earning a reported €75m a year in income, the group’s assets include thousands of purpose-built student bed accommodation units in the UK, along with commercial properties in the UK, in Germany and to a lesser extend in Spain.

Other assets include the €150m Elysian tower apartment and commercial development in Cork City, and valuable development sites in Dublin, Cork and Edinburgh. About 75% of the value of the group’s strongly performing assets are in the UK — part of the reason the O’Flynn loan portfolio sale was sold so strongly earlier this year by Nama to Blackstone, for €1.1bn.

Major Irish developments undertaken by O’Flynn Construction have included the Eastgate Business Park in Cork, the Mount Oval Rochestown scheme of 800 homes and retail centre, and the redevelopment of Ballincollig Town Centre — which is also the Irish HQ of the O’Flynn Construction Group.

Having started in house-building in Cork in the late 1970s, the family-controlled firm — headed by brothers Michael O’Flynn and John O’Flynn along with key director Michael Kelleher — expanded during the 1990s to become a complex group of building, development and investment companies. It had €1.8bn in loans owed to state-guaranteed banks transferred into Nama in 2009. It’s understood the €1.8bn loanbook included over €20m in personal investment loans to MD, Michael O’Flynn.

The group had continued to work assets and pay back borrowings during its five years under Nama control.

It secured loans from outside sources in the period, such as a €57m 22-storey-high student development in Wembley, London, and also sold an office building in Cork’s East Gate to pharma company Eli Lilly.

The O’Flynn Group was one of the first and ‘Top Ten’ Nama debtors, in 2009, and became one of the first to emerge from the Nama process in April of this year, when its ‘Project Tower’ loanbook was acquired for about €1.1bn, by the New York-based Blackstone Group. Rival bidders making offers over €1bn for the loanbook were Lonestar and Davidson Kempner.

Yesterday’s move by Blackstone to appoint an interim examiner over four O’Flynn companies came as a swift surprise, after several months of what’s been described as tough discussions between the parties.

Company MD Michael O’Flynn last night branded it “very unexpected and aggressive” and said “O’Flynn Group loans and some separate personal loans are fully serviced and all payments are up to date”.

Within the past year, Michael O’Flynn established O’Flynn Capital Projects to develop “other so-called wet assets” needing restructuring, refurbishment, and further development, and that company has offices in Cork, Ballsbridge in Dublin, and in London.


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