Greenstar in Receivership - hundreds of jobs at risk - waste collection chaos

[C. Flower]

There were many signs that all was not well with Greenstar.

Reportedly, banks have pulled the plug although Greenstar claimed that with more cash they could have been viable.

Eight hundred jobs at risk, and uncertaintly over who will take on rubbish collection.

Another triumph of privatisation?


http://www.google.ie/url?sa=t&rct=j&...j79vgGBUtWB_ZA

[DCon]

I hope the owner was not following the Quinn example and using borrowed cash to fund his kids wealth portfolio

[Baron von Biffo]

On News at One it was claimed that the company rather than the banks requested the receivership.

[ZeroWedge]

This smells very dodgy to me

Greenstar owes over €83m to seven banks - Bank of Ireland, AIB, Ulster Bank, HSBC, Barclay's, Rabobank and Certus, which was formerly Bank of Scotland (Ireland).

It had been working to find an investor for the business.

NTR, the parent company of Greenstar, also issued a statement saying it noted the appointment and that the banks have made their own decision on how they want to move forward.

Why did they borrow from seven banks? Why is the parent company not required to pay the debts of the subsidiary? NTR has the cash to pay, because it received a vast sum of money from the taxpayer in 2006 when the state bought out their monopoly on the Westlink bridge for €600million.

It looks to me like another SiteServ job, strip the cash out, load it up with debt and make someone else pick up the loss. The only thing missing in this picture is Anglo and the carribean tax dodger, Denis the menace.

[TotalMayhem]

NTR has the cash to pay

Things don't seem to be going all that well at One51 either, and they're on of NTR's major shareholders...

A selection of not so favourable headlines in 2012:

One 51 suffers second huge loss after new writedown

Philip Lynch sues former employer One51

Director of One51 firm challenges redundancy notice

One51 quiet as plastics deal flounders

[ZeroWedge]

The receiver will sell Greenstar as a going concern or else sell off the assets individually. Either way it doesnt matter. The working capital, ie the rubbish trucks and other equipment, continue operating under a new owner. The rubbish still gets collected. The same number of people will still be employed to do the job. The banks take the loss.

The only question is Qui Bono? Denis the Menace or some other Mitt Romney type private equity leech?

[C. Flower]

The receiver will sell Greenstar as a going concern or else sell off the assets individually. Either way it doesnt matter. The working capital, ie the rubbish trucks and other equipment, continue operating under a new owner. The rubbish still gets collected. The same number of people will still be employed to do the job. The banks take the loss.

The only question is Qui Bono? Denis the Menace or some other Mitt Romney type private equity leech?

Hmm. If the Dublin rubbish collection business was so profitable, why are they in receivership?

There is every possibility that on present contracts, they could not have stayed above the waterline. It is a business with heavy start up costs and overheads.

If there is a right off and someone steps in and picks up the assets and contracts for next nothing, of course, like Liberty Insurance, they might do well.

But what will happen about people who have paid up front for the service ?

Dublin City Council should be running this. There were constant problems reported with Greenstar. Waste collection is too important to be left to the vagaries of speculators.

[ZeroWedge]

Hmm. If the Dublin rubbish collection business was so profitable, why are they in receivership?

Because they cant pay their debt, out of their cashflow. They overborrowed, probably to strip cash out, to pay management remuneration and shareholder dividends.

Thats common business practice these days. The real question is why the banks lent the money to do this. And why didnt the banks get any recourse to the parent company NTR, when granting the loans. Thats the part that smells of corruption.

Dublin City Council should be running this.

DCC couldnt run a lemonade stand.

Waste collection is too important to be left to the vagaries of speculators.

Rubbish collection is irelands most important industry. Give me a feckin'' break leftie!

[disability student]

NTR have been trying to sell Greenstar for the past 12 months as they must have known Greenstar's financial troubles.

Their sale to American firm fell through last year-Private equity houses Anchorage Capital, Oak Tree Capital and Gores Group have previously been linked with bids for Greenstar Ireland.

It's a possbility that these banks couldn't fund them anymore although they have no problems meeting loans.

[disability student]

There was a specific convenant clause inserted in the funding agreement with the banks which was par for course. Greenstar broke that convenat clause as banks have pulled the plug.

[CMK]

DCC couldnt run a lemonade stand.

That they ran waste collection reasonably well for, oh, a hundred years or so is probably neither here nor there in this instance. That we're less than ten years into private ownership of waste collection and already operators are starting to go under with huge debts (Greenstar won't be the last) is, I suppose, a testament to the inate superiority of private companies delivering essential public services. If only us bloody Lefties, I suppose, could take the long view; what's municipal chaos against prospect of market equilibrium for future generations!

Expect the state to have to step in and, furthermore, to have to take on Greenstars debts [I]and[I] pay for the service to continue.

While rubbish collection is important and a vital service within, say, ten years time we'll likely be looking at, for example, a large regional hospital, privatised via Trioka diktat, having to close its doors because of the debt burdens acquired by its owners. Many health trusts in the UK are already staggering and/or on the verge of bankruptcy under the costs of servicing debts acquired through the Private Finance Initiative.

[tirnanog33]

"Because they cant pay their debt, out of their cashflow. They overborrowed, probably to strip cash out, to pay management remuneration and shareholder dividends.

Thats common business practice these days. The real question is why the banks lent the money to do this. And why didnt the banks get any recourse to the parent company NTR, when granting the loans. Thats the part that smells of corruption."
And there's the rub of capitalism.!