Oaktree Capital Management, the Los Angeles-based firm, is reportedly in talks to buy a controlling stake in a struggling Irish housebuilder.
The firm, which has been active in the US recently buying $1.7 billion of distressed debt from the Federal Deposit Insurance Corporation (FDIC), wants to buy McInerney Holdings, according to a report in the Financial Times.
The newspaper said McInerney is struggling with €236 million of debt, and is in “advanced discussions” with Oaktree about selling the stake. Lenders to the firm include Lloyds Banking Group, Royal Bank of Scotland and Spain’s BBVA, it added.
A source is quoted as saying: “McInerney still has good land holdings and so the logic is that if Oaktree puts in the right amount of money, then it will have the working capital to get going again.”
In May, the public Irish housebuilder said its principal markets of the UK and Ireland continued to experience challenging conditions last year. “While there have been signs of improvement in the UK housing market since late last year, it is modest and forward progress is expected to be slow,” it said.
It added: “In Ireland, the market for our standard product is showing signs of levelling off after the very steep declines of 2008 and 2009. Average prices have fallen significantly and we believe that affordability for first time buyers has returned to 1996 levels.”
It owns a construction firm, McInerney Homes Ireland, as well as other subsidiaries McInerney Contracting Ireland, McInerney Homes UK, McInerney Spain under the Alanda Group brand, and Hillview Developments, a commercial property division.