Ireland

McInerney Holdings, one of the country's oldest house builders, is fighting for survival this week as it aims to strike a deal which would restructure its €236 million debt pile, InsolvencyJournal.ie reported. The company is the latest in a long line of construction firms to be hit by the slump in property prices and the collapse in construction activity. At latest count, construction firms accounted for one in three insolvencies in Ireland.

The McCormick Macnaughton Caterpillar dealership in the Republic has been taken over by Canadian firm Finning, but the group’s rental businesses have ceased trading, The Irish Times reported. Assets belonging to three rental-related companies in the McCormick Macnaughton group, including three premises, will be sold off at an auction scheduled for September 4th. Management at Finning, the world’s largest Caterpillar dealer, took over the running of the dealership in west Dublin on Monday.

With loan default rates continuing to cause headaches for banks, it seems an increasing number of lenders are dabbling in debt-for-equity swaps as a viable alternative to insolvency, InsolvencyJournal.ie reported. As the downturn continues to bite, and investors as scarce as hen's teeth, there's very little appetite for business assets in Ireland at the moment. Fire-sales can result in lower loan recoveries and because of this, liquidation is often not the best option for banks who wish to recover some of the debts owed to them when companies default on loans.

The number of people seeking employment assistance from the State continued to rise in July, with the Live Register jumping by 8,500 during the month and the unemployment rate rising to 13.7 per cent, its highest in 16 years, The Irish Times reported. The Central Statistics Office said the adjusted Live Register rose to 452,500 last month, with a net figure of about 1,700 more people signing on each week. This brings the unadjusted increase in the year to July to 34,403, a rise of 8 per cent. This compares with the increase of 9 per cent, or 37,420, recorded in June.

Shares in AIB fell sharply on the Dublin market today as the bank reported increased losses in the first half of the year, with bad debts increasing over the period, The Irish Times reported. The bank's stock fell as much as 13 per cent in early trade before regaining some ground to trade 5.6 per cent down at 93 cent by 5pm. The bank recorded a pre-tax loss of just over €2 billion for first half of the year, with its Irish operations posting a €2.3 billion loss before provisions.

Ireland’s Financial Regulator has appointed independent consultants to review Ireland's credit unions in a bid to curtail rising bad debts and mounting losses in the sector, InsolvencyJournal.ie reported. The move comes amid fears about the scale of bad debt in the sector after it was revealed earlier this year that a number of credit unions around the State face serious solvency issues. Last week, the Central Bank and the regulator announced the appointment of Grant Thornton to carry out the large-scale review, which was requested by Minister for Finance, Brian Lenihan.

Cash flow problems remain rife among small businesses as banks continue to restrict credit, according to the Small Firms Association (SFA), The Irish Times reported. The representative group for small business in Ireland has repeated its calls for Government intervention, arguing in its autumn economic statement there is “clearly a market failure” in the provision of loans to small and medium enterprises (SMEs). One-fifth of its members have seen the amount of working capital available to them decrease in the last three months, said the SFA.

AIB’s pretax losses could be as high as €3 billion when the bank releases its interim results this week – a key week for the European banking sector as a range of banks provide updates on impairment charges, capital strength and cost reduction programmes, The Irish Times reported. The extent of the decline in the bank’s pre-provision operating profits and its update on impairments to development loans that have not been transferred to the National Asset Management Agency (Nama) are set to be under the spotlight on Wednesday.

The four-star Osprey Hotel and Spa in Naas has become the latest hospitality victim of the recession as failures in the sector continue to mount, InsolvencyJournal.ie reported. AIB appointed a receiver over Naas Developments Limited, the company behind the hotel, last week. The Leinster area appears to be bearing the brunt of the hospitality downturn and the latest appointment brings to eight the number of hotels which have entered receivership in the area in recent months.

Almost six months to the day after the Residence club on Stephen's Green was seized by the banks, a new owner has taken over the reins at the private members' club, InsolvencyJournal.ie reported. Businesswoman Olivia Gaynor Long bought the club from receiver Jim Stafford last week and the business will now be run by a recently-formed company called Molana Ltd. The new firm is wholly owned by Long, and lists public relations consultant Eugene Long as one of its directors.