The Association of Farm & Forestry Contractors in Ireland (FCI) has advised its members to be cautious on the process of resolution of machinery debt issues.
It has emerged this week some finance houses have started to take a new approach to the process of outstanding debt recovery.
Over the past week some contractors, who have outstanding and unresolved machinery debt issues, have been personally contacted by agents working on behalf of finance houses with a view to resolving part of their outstanding debt by means of machinery asset returns for subsequent disposals at auctions.
Friends First Finance ceased asset finance operations in 2009.
Michael Moroney, FCI Chief Executive advises contractors who are engaging with Wilsons Auctions in a debt resolution process, to get additional independent financial advice before agreeing to any new terms from previous agreements.
“We are urging contractors to examine their options very carefully; to look at the option of asset disposals as a means of resolving an outstanding machinery debt issues, but only if that disposal will not impact significantly on the viability of the farm contracting business,” he said.
The FCI is based in Clonminham Estate in Portlaoise.
“The issue is national one but undoubtedly this will impact on some local farmers and contractors,” Mr Moroney said.
“Many contractors have come through difficult times in terms of profitability and cash flow on the back of challenging banking changes and a downturn in farming profits.
“We recognise that the disposal of assets that are part of financial legacy issues need to be very carefully managed by farm contractors so as to ensure the continued viability of their businesses that are vitally important the success of Irish agriculture,” said Mr Moroney.
“FCI members will be observing the auction disposal process of any such machinery assets so as ensure that the auctions are fair and open.
“If contractors choose to dispose of assets, as part of the debt resolution process, FCI needs to be satisfied that the assets can achieve fair and realistic market values based on independent valuations,” he added.
Loans value
While it is unclear as to the extent of the outstanding loans value, FCI understands that 30 contractors and farmers will be personally contacted in this initial debt recovery phase, to recover debt that is estimated to be initially valued in excess of €4 million.
FCI understands that there are in total 150 contractors and farmers on the debt recovery list.
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