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A rescue plan has been approved by the High Court for Barryroe Offshore Energy that involves an injection of €6m of funding from its main shareholder, businessman Larry Goodman.
Mr Justice Michael Quinn confirmed the scheme proposed by the oil and gas explorer’s examiner. Mr Goodman’s Lorsden Jersey Limited company, has agreed to invest €1m in initial funding, with a further €5m available upon agreement of an appropriate business plan.
Lorsden is the parent company of Mr Goodman’s Vevan Unlimited vehicle, which last July petitioned for the appointment of an examiner to Barryroe, in which it has a 20% stake.
The court application came just days before shareholders were due to vote on putting the company into liquidation after Environment Minister Eamon Ryan in May refused to grant a permit for its key Barryroe oil project off the Cork coast.
The court heard on Friday that the plan, put together by examiner Kieran Wallace of corporate advisory firm Interpath, would involve extinguishing the shareholding of some 10,000 members.
Their shares were already worthless when the petition for an examiner came to court, as the firm was insolvent, said Mr Wallace’s senior counsel, Kelley Smith. However, the shareholders would receive a 5% return on any potential future proceeds from the Barryroe oil field, either through a sale or development.
At a recent creditors’ meeting, 65% of the members’ value voted against the scheme, while the unimpaired Revenue Commissioners, as a preferential creditor, and unsecured creditors, who will receive 70% of their debt, voted in favour, the court heard.
The Minister for Environment, categorised as a standalone class of “decommissioning creditor”, whose “claim is neither quantified nor admitted”, had corresponded with Mr Wallace but did not object to the plan before the court, Ms Smith said.
The scheme envisages an expert determination process with engagement from the minister in relation to its potential claim.
Taking into account the proposed cash injection, including the €5m that is contingent on the formulation of a business plan, Mr Wallace concluded the company has a reasonable prospect of survival as a going concern.
Ms Smith said the business will shift away from oil and gas exploration towards opportunities in green and renewable energy sectors. The current directors will be replaced on a date to be agreed.
No objections came before the court, although the judge considered correspondence from two shareholders who were opposed to the plan. Mr Justice Quinn was satisfied he should confirm the scheme of arrangement, which will take effect next Wednesday.
Barryoe Energy said last week that it expected the shares listings on AIM and Euronext Growth exchanges would be cancelled “on or about November 7”.
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