Unsecured creditors of the company handling the Jeanie Johnston replica Famine ship project stand to receive 60 per cent of what they are owed while "local authority" creditors would get shares in the company under terms to be considered later this month, the High Court heard yesterday.
Mr Justice Kelly directed that meetings of the two sets of creditors of Jeanie Johnston (Ireland) Co Ltd should be held in Tralee on October 25th to consider the terms. If the scheme of arrangement is approved by a majority of the creditors and then receives court approval, the board of directors will retire and be replaced by a new board.
The total cost of the project to date has been €13.6 million, which is significantly higher than the figure originally budgeted.
If the scheme of arrangement is approved by the unsecured creditors and sanctioned by the court, the amount owing to them is to be reduced from €1.093 million to some €655,000, Mr David Barniville, for the company, said yesterday.
The amount owing to Kerry County Council and Tralee Town Council - some €3.822 million - would be converted into deferred shares in the company if the scheme is approved.
Time was of the essence in relation to the proposed scheme of arrangement, since the company was required to sail the ship to the United States early next year to honour various commitments given to corporations and others who had donated to the project, Mr Brendan Dinneen, the secretary of the company, said in an affidavit.
Mr Dinneen said that the proposals were designed to put the company back on a solvent footing. Each constituent of the proposals had been agreed in principle by each of the parties affected. The proposals would not be implemented unless all of them were implemented together.
The proposals had been initiated by the company last July and Kerry Group plc was agreeable to making a financial contribution in the form of investment in the company's share capital and would be represented on the baord of directors.
The proposals came about following negotiations between the company, representatives of Kerry Group, Kerry County Council, Tralee Town Council, Shannon Free Airport Development Co (SFADCO) and the Department of Communications, Marine and Natural Resources.
Provided that a majority representing three-fourths in value of the unsecured and local authority creditors, present in person or by proxy, voted in favour of the scheme, the matter would then have to be brought back before the court for ultimate sanction, Mr Dinneen said. If so sanctioned, the scheme of arrangement would be binding on all unsecured creditors, local authorities and the company.
Under the proposals, the company, which owns a shipyard at Blennerville, Tralee, and has contracted with a third party to sell a site and buildings for €1.46 million, would complete the sale pending the resolution of the difficulties.
Some €3.696 million in funding which had been provided to the company by the Department will not have to be repaid. It is intended that a portion of that amount will be converted into equity in the company.
Money owing to SFADCO, amounting to €1.979 million, would be converted to deferred shares of €1.25 each.
Mr Dinneen said that a claim by M.J. Marshall Electrical Ltd against the company was in dispute and was not subject to the scheme of arrangement.