Brandywell Stadium revamp firm facing financial crisis
The construction company behind the Brandywell Stadium refurbishment is to seek a voluntary arrangement with its creditors to avoid liquidation, just weeks after completing the Derry project.
The ‘Journal’ understands that dozens of sub-contractors brought onboard for the Brandywell and other projects undertaken by McAleer & Teague Ltd., now stand to suffer substantial losses of at least around 80 per cent of monies owed to them as a result of the crisis facing the firm.
Those affected include sub-contractors and trade businesses across Counties Derry, Donegal and Tyrone.
Dromore-based firm McAleer & Teague has delivered numerous large-scale construction projects across Ireland and won an award for its restoration of the Museum of Free Derry last year. The firm also built the Healthy Living Centre in Creggan.
McAleer & Teague signed a contract with Derry & Strabane District Council for Phase One of the Brandywell Regeneration Project in November, 2016, following a tender process and the local Council has confirmed it had paid the firm for works finished and checked to date.
The £7 million development, funded by the council and the Social Investment Fund, was completed in March this year and officially opened in April.
Just weeks later, however, the Directors of McAleer & Teague have informed employees, customers, suppliers and subcontractors that it now hadno option but to seek a Company Voluntary Arrangement (CVA).
Proposals for the CVA have been drawn up with the assistance of Keenan Corporate Finance Limited, a restructuring and insolvency firm in Belfast.
Creditors will be asked at a meeting in Belfast on June 19 to vote on the CVA. If they accept the CVA, it is understood, unsecured creditors owed money will receive, at most, 20.9p for every £1 owed to them. If this proposal is not backed and the company goes into liquidation, they will receive as little as 4.9p for every £1.
In the letter issued by McAleer & Teague and seen by the ‘Journal,’ the company’s directors stated: “Unfortunately, after suffering losses on a number of projects we have reached the point where changes will have to be made to ensure the survival of our Company. It is our intention to embark on an operational restructuring via a Company Voluntary Arrangement (CVA). The proposed CVA will allow the company to continue trading with work ceasing on some projects and some projects continuing to completion.
“We are very sorry that this situation has arisen, however, we feel it is the best direction to take the Company. We have tried to pro-actively manage the situation and the decision to propose a CVA was not taken lightly. It is our belief that entering into the CVA will deliver the best return to all stakeholders of the business. The alternative is liquidation and as outlined in the CVA, stakeholders will be significantly worse off in this scenario.”
McAleer & Teague said yesterday they had no further comment beyond the contents of the letter and CVA plan.
In answer to questions from the ‘Journal’ on the Brandywell development, a spokesperson for Derry City and Strabane District Council confirmed that McAleer & Teague “had been paid for works certified and completed to date on site, less the appropriate contract retention sum.”
She added: “Council has still to determine the Final Account for the completed contract, as there are a number of cost matters that have still to be agreed between the contractor and council’s consultant team.”
Council is unaware of any implications for the future of Phase 2 of the Brandywell works arising from the current contract for Phase 1, she added, and confirmed: “Council does not currently have any other construction contracts with McAleer & Teague.”
The spokesperson added that council was “not in a position to comment on the financial dealings between McAleer and Teague and any of their sub-contractors, or suppliers.”