Division at heart of £22m dispute with John Magnier may be wound up
The division of Laing O’Rourke at the centre of a row over a failed Spanish property deal with Irish tycoon John Magnier could be wound up, it is understood.
Explore Investments [No 2] is a division of Laing O’Rourke’s development arm Explore Investments and was set up by the UK’s third-largest contractor to jointly develop a 3.6ha site in Marbella.
According to the Times newspaper, Magnier is considering demanding a “cease trade” order against his joint-venture partner after the pair fell out over payments for the €25m (£22m) site.
Magnier claims that Laing O'Rourke owes him half of the €25m (£22m) price paid for the site in December 2006, but the Irish contractor disputes this and has so far paid just €3m (£2.6m).
A source close to the case said: “A deal was done subject to planning permission being granted and that has not been possible. The Spanish authorities have changed the game [by not granting the expected planning permission]. Laing O’Rourke bought 50% on the basis of title being unencumbered and planning permission granted. So there is no deal.”
It is understood that there will be a further hearing on the dispute in Ireland on 15 December, but that Magnier’s representatives could serve “cease trade” papers against Explore Investments [No 2] by the end of this week.
A Laing O’Rourke spokesperson said there would be no more funding made available to Explore Investments [No 2] as the site was no longer viable due to Spanish authorities giving planning permission for only two villas.
He added: “Laing O’Rourke will be providing in full for the €3m loan due from its subsidiary, Explore Investments [No 2], following a judgment entered against Explore Investments by an Irish court. This provision will have no material affect on the group trading results for the year.”