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Rescue package saves Siac Construction Group

Irish contractor Siac Construction Group has received approval from the High Court in Dublin to exit examinership, but its UK subsidiary Graham Wood Structural is in administration.

Bouygues subsidiary and transport infrastructure specialist Colas is among the investors that has injected money into the Irish contractor to save it from insolvency.

Siac majority shareholders the Feighery family have been joined by the Irish arm of Colas (Colas Teoranta), Northern Irish investment company Ducales Trading and the contractor’s former chief executive Finn Lyden to save the 100-year-old company.

The contractor is one of Ireland’s largest construction companies and specialises in civil engineering, structural steel, roofing and cladding.

However, the new investors were not willing to invest in Siac’s steel business arm and its UK subsidiary Graham Wood Structural entered administration (see box) on 6 February, with 50 job losses, and has not been saved.

Graham Wood Structural

The firm provided design-and-build steelwork services across the UK for new-build and refurbishment projects.

It had worked with main contractors including Costain, ISG, Kier, Wates and Willmott Dixon.

In its results for the year ending 31 December 2012, published in December 2013, the directors said Graham Wood Structural owed more than £1.8m in liabilities.

The contractor made a pre-tax loss of £21.9m in 2012, compared with a loss of just under £1.5m in 2011.

A Grant Thornton spokeswoman said GWS’s access to working capital had been restricted as a result of the examinership of Siac at a time when “continued trading difficulties created associated incremental cash needs”.

Company directors were unable to find a buyer for the business, which ceased to trade following the appointment of the joint administrators, with around 50 employees made redundant.

The rescue package approved by the High Court provides for Siac’s operating businesses, including its civil engineering, bituminous products and roofing and cladding divisions, to be separated from its investments and commercial development businesses.

Its shareholders have also raised €10.5m (£8.6m) to invest in the core trading divisions and provide a debt-free balance sheet for the operating companies.

A statement from Siac, which employed aorund 250 people, said: “All liabilities of the companies of whatever kind will be extinguished.”

The contractor will now enter a restructuring programme that will involve job losses; however, chief executive Martin Maher said they would be “kept to a minimum where possible”.

Siac entered examinership – which grants High Court protection to Irish companies while they restructure – in October 2013 after sustaining substantial losses on Polish roads contracts.

Grant Thornton restructuring and reorganisation partner Michael McAteer was appointed examiner to find a rescue package for the contractor.

The statement added that the company would pursue the Polish authorities “for the severe damage inflicted to Siac’s business and consequently on to creditors”.

Mr Maher said: “I am relieved that the Siac group established in 1913 can once again strive to be a leading Irish construction business. 

“I wish to acknowledge the difficulties and uncertainty this process created for all creditors, staff and stakeholders. 

“I wish to thank creditors, customers and employees for the support they have shown and hope the scheme structure can in some way negate the difficulties experienced by the company’s creditors.”

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