A LONGSTANDING CONSTRUCTION group has been called on to clarify what the future holds for its workers, after a provisional liquidator was appointed to oversee two of its companies.
The High Court heard during an application today from SIAC Construction Ltd that the roughly 100 workers at the two firms will have to be informed that there is insufficient cash to pay them.
Founded in 1913, the group counts many high-profile projects in its portfolio, from the €300 million Galway-Dublin motorway to The Spire.
Trade union Siptu has demanded answers for its workers as has one TD who said it made no sense how the companies could fold during a “construction boom”, and demanded that its books be opened up to the liquidator and workers representatives.
The judge said the provisional liquidator would help ensure an orderly winding up of the businesses, and he granted powers allowing the retention of employees and sub-contractors working on various projects including ones in Dublin, Cork and Kilkenny.
While the parent company has a net liability of €12.3m, its division called SIAC Roofing and Cladding Ltd is predicted to have losses of around €500,000 this year, despite having been profit making for several years.
A second application seeking the appointment of a provisional liquidator to another firm in the group, called SIAC Holdings (Ireland) Ltd will be made later this month.
The Journal learned of meetings held this week by the company, where some staff were informed of struggles in paying its suppliers and that job losses may follow.
Some senior members of management may also be resigning, according to two sources who spoke to this publication.
When contacted, the Department of Enterprise said it had not received any collective redundancy notification in relation to potential redundancies at the company.
At the High Court today, counsel said that there had been a degree of uncertainty and concerns about the companies ability to pay their debts expressed by SIAC’s employees and suppliers in recent months.
The companies accept that the fact it cannot pay its staff will cause significant upset to them, the court heard.
Trade union Siptu, which told The Journal it had been alerted to issues within the company in recent weeks, stressed that SIAC needs to clarifies the future of its work with its staff.
“There’s a lot at stake here. What we want is for the company to come out and confirm to their employees what’s the situation with job security and alleviate the concerns of their employees,” Siptu’s sector organiser for construction John Regan said.
While SIAC Cladding and Roofing’s registered address is in Clondalkin, Dublin, it also has a premises in Wilton in Cork city.
TD for Cork North Central Mick Barry said inspections needed to be conducted on the company’s affairs to examine how it ended up in this position.
“There should be no job losses in construction in the middle of a construction boom,” he said.
“SIAC’s books, by which I mean the books for the entire company, should be opened straight away for inspection by both the liquidator and by workers’ representatives.”
Barry added: “If any of the workers wish to contact my office for help and advice we will be happy to help in any way that we can.”
Sinn Féin TD Thomas Gould said the news was “devastating” for the workers.
“I suppose the question now, is do they get paid? There’s a lot of questions to be answered there and they need to get entitlements. We’re in middle of a cost-of-living crisis so for a lot of families every penny will count.”
The SIAC group did not respond when contacted by The Journal today.
But it claims that it experienced severe cash difficulties in recent years resulting in the affected companies becoming loss making and insolvent.
The High Court heard that the company has been beset by difficulties, due to the negative impact cause by Covid-19 on the construction sector, a significant increase in costs in labour and materials and insurance and bonding difficulties.
The loss of senior key personnel in recent months had also had a negative impact on the companies, the court heard.
Onerous conditions placed on those performing civil engineering projects for public bodies in Ireland was also cited during the application.
The companies within the group had been relying on financial support from its overall parent company XTA Investments Ltd, €9.5m owed in loans that were obtained from Ulster Bank in recent years.
Mr Justice Brian O’Moore added that the court had been informed that minority shareholders in XTA are considering bringing legal proceedings against that company.
He accepted that the two companies are insolvent and unable to pay their debts as they fall due, and he appointed insolvency practitioner David O’Connor of firm BDO as provisional liquidator.
The provisional liquidator can also secure the group’s assets worth some €11.2m to ensure that there will be no “self- help” by creditors taking stock that belongs to the firms, which the judge said can occur when construction businesses are wound up.
The judge also directed that the firm’s director files a statement of affairs in the next 28 days.
Contains reporting by Aodhán Ó Faoláin
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