The company behind a renewable energy project launched last year by Taoiseach Enda Kenny has been granted High Court protection from its creditors.
The court on Monday appointed Michael McAteer of Grant Thornton as interim examiner to Mayo Renewable Power, which plans to build a wood-chip burning electricity generator at Killala at a cost of €180 million.
Mayo Renewable Power’s plans ran into financial difficulty in recent weeks and this was compounded when a company that had been hoping to supply the Irish plant with fuel sued its promoter for $60 million in a New Jersey court in the United States.
In May, British bank, Barclays, one of three lenders that were originally meant to contribute €118 million to the project, pulled out as a result of the uncertainty surrounding the UK vote to leave the European Union.
Neither it, nor the project’s other lenders, AIB and Ulster Bank, have provided any finance. Mayo Renewable’s lead backer, Irish American businessman’s Gerald C Crotty’s Weichert Enterprises has spent €90 million on the development, €10 million more than it originally planned, through its parent, US-registered Rockland Mayo LLC.
Mr Kenny laid its foundation stone last October but the project ran into a number of difficulties and building was suspended last month.
One of the problems was with sourcing a boiler, a key component. The banks’ consent to a change of supplier was required, and this delayed funding.
The High Court heard that builder John Sisk & Son is the main contractor and there are 130 sub-contractors and suppliers. The construction company has sought €17.5 million for work done.
If the court confirms Mr McAteer’s appointment when the case is returned on September 12th, he will have up to three months to come up with a rescue plan for the company.
Creditors will not be able to enforce debts against the business during that time, although it is open to the examiner to pay suppliers if he believes it is in the company’s best interest.