Inside the world of business
Speed pays in corporate rescue
PRE-PACKAGED administrations are a feature of insolvency law in Britain. They involve the creditors, debtor company, administrator and possibly other parties agreeing a plan, generally involving the sale of the business to a new investor, and then going to court to get protection and other necessary orders to allow it to be executed quickly.
At first glance, Musgrave’s purchase of Superquinn, agreed about 12 to 15 hours after the latter’s banks appointed receivers on Monday night, looks like a pre-pack. It isn’t, for three reasons: one, it was only possible to do the deal quickly because Musgrave had run the rule over Superquinn a few months before. It was, in reality, the end of a long process. Two, it is a receivership – Irish company law only allows for administrators to be appointed to insurers and banks. Three, Irish company law does not have pre-packed anything.
But the deal does suggest that it is time that Irish law facilitated speedy corporate rescues, where possible and viable. As the number of insolvencies increased in the Republic over the last two years, company lawyers have argued that more efficient use of existing mechanisms could have saved some of those who went to the wall.
A more formal system could allow for the concerns of unhappy creditors and other affected to be taken on board and anticipate some of the possible hurdles to a deal being completed and a business and its jobs being saved.
Irish interest high in aviation leasing deal
WHILE BOTH US insurer AIG and UK bank Royal Bank of Scotland have thus far failed to dispose of their “non-core” aviation leasing arms – both of which have Irish operations – expectation is growing that a deal may now be on the way. While AIG had originally hoped to sell its leasing arm, ILFC, which is one of the world’s largest, it failed to attract a buyer. Now it appears it will look to sell off 25 per cent of the lessor in a public offering.
If it does, it will be big news for RBS Aviation Capital, which is also in the market for a buyer after original plans to sell the company were shelved in 2010. While ILFC only has a small technical office in Dublin, employing about a dozen people, RBS is headquartered there.
Given Ireland’s pre-eminence in the sector, however – since the days of GPA in Shannon, Ireland has been a global centre for the business, and was identified as having “leadership” potential in last week’s jobs strategy for the IFSC – it is likely that a new owner might already be Irish based.
Indeed one touted bidder is Guy Hands’s private equity outfit Terra Firma, which owns Awas, another Dublin headquartered company. Bank of China’s BOC Aviation is also in the frame.
