A court in Lyon, France will rule on Tuesday on whether to put Transmontagne, a French leaseback property operator that has a number of Irish investors on its books, into liquidation.
Transmontagne manages properties in ski resorts including the 1968 Olympic resort of Chamrousse, as well as in Superdevoluy, La Joue du Loup, Le Queyras, Pra-Loup, Valfrejus, Le Lioran and Bardonecchia.
It also runs the Ski Dubai complex at the Mall of the Emirates in Dubai. One of its largest shareholders is the French state-run bank, Caisse des Depots et Consignations. On July 10, Transmontagne applied to the Court du Commerce in Lyon for protection from its creditors.
A receiver was appointed, but it is understood that the receiver has not paid rents to its leaseback investors and has now run out of money. The company has been unable to source funding, even from Caisse des Depots, and the Lyon court has made reference to the ‘‘catastrophic nature of Transmontagne’s business’’.
A number of Irish investors have purchased units in the Domaine d’Arseille project in Chamrousse. Some of their properties have not been fully completed, while those who have completed properties have not been paid rent, which has been due to them since last year.
A number of Irish purchasers have now formed a group. Representatives of the group visited France last weekend to discuss outstanding issues with Transmontagne, but no resolution was reached. There are 37 Irish buyers in the Domaine d’Arseille project alone.
If Transmontagne is wound up, the properties which its clients own will no longer officially be classed as leaseback.
Unless buyers can get another leaseback company to take on the management of their units, they could be obliged to pay the 19.6 per cent French Vat that was originally waived by the French government because the units were to be operated under a leaseback scheme.
‘‘It’s a bitter pill to swallow, because we feel the properties were 20 per cent overvalued, due to the fact that they were being sold as leaseback,” said one buyer.
‘‘We are now facing a scenario where our properties have essentially devalued by 20 per cent from normal market values. We have been paying mortgages since completion with no rental income.”
The buyer said he would have to hand the keys of his property over to the bank, as he could not afford to pay back the Vat or to continue paying his mortgage without any income from the property.