Estonians will recoup €2.5m from Irish firm

Examiner’s scheme for Limerick company is sanctioned by court

The Orchard Estate in Pallaskenry, Co Limerick. File photo

John Mulligan

Estonian investors in a Co Limerick housing scheme are set to recoup almost €2.5m of their money after the examiner of a company behind the project struck a deal that will see the homes completed.

The figure represents all the capital they invested in the scheme, as well as some interest.

Irish building company Top Drawer Developments secured finance via Dublin-based peer-to-peer lending firm Property Bridges, which originated loans for the housing scheme from an Estonian crowdfunding website, Evoestate.

But Top Drawer got into financial difficulties as the scheme was being built, as material costs soared within the construction sector.

Limerick City and County Council had signed a fixed-price contract in August 2020 to buy the homes at the €3.5m-plus development at Pallaskenry, called The Orchard Estate, following approval from the Department of Housing, Local Government and Heritage.

But as it was a fixed-price contract, the council had no mechanism to seek additional funding for the planned acquisition from the department as inflation costs and supply chain issues affected the overall price of the project.

The local authority then assigned the purchase contract to housing charity Focus Ireland, which agreed to pay a materially higher price for the 16 homes than had been agreed by the council with the developer.

Property Bridges has now confirmed to investors in Estonia that the examiner of Top Drawer Developments has brought forward a scheme of arrangement, which has been authorised by the court.

“The new investor has agreed to pay Property Bridges’ lenders €2.475m from the sales proceeds of the first 12 houses,” it said. The houses are due to be completed by August.

Property Bridges added that it is “extremely disappointed with how this project unfolded”. However, it said it believes that the scheme of arrangement is a “very positive outcome” for lenders.

A pre-payment of €150,000 was due to be paid by Property Bridges to lenders last Friday and the remainder over the next six months.

“The overall payment will result in the lenders receiving all of their capital back plus the majority of their interest,” it noted.

Property Bridges said that it will maintain full security over the property as the scheme of arrangement is implemented.

Focus Ireland did not respond to queries to confirm if it has secured funds to complete the housing project.

Limerick City and County Council had claimed last year that not assigning its contract to Focus Ireland would have resulted in an unfinished ghost estate, “with no plans for construction nor any delivery of social housing units in the short to medium term”.

Property Bridges has secured about €10m in finance on the Estonian crowdfunding website for about 39 projects across Ireland. They include social housing projects in Co Cavan, Co Meath and Co Leitrim.

Property Bridges is backed by Lagan Investments, a unit of Northern Ireland home builder Lagan.

Last year, Property Bridges secured a €100m funding line from Nordic bank Aros Kapital. That funding will be used to fund housing schemes of between 10 and 100 units.

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