Contractors and farmers are being pursued for machinery debts in what has been described as a new heavy-handed approach.

In recent days, personnel from Wilsons Auctions, acting on behalf of Everyday Finance, have contacted 30 farmers to arrange voluntary surrender of machinery. It is intended to auction off the machinery to address outstanding debts, some of which go back at least a decade.

The loans are valued at €4m.

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The Association of Farm and Forestry Contractors of Ireland (FCI) understands a further tier of 120 agri-machinery loans exist with Everyday Finance

We are urging contractors to examine their options very carefully

It is not certain if Everyday Finance owns the loans, as it has both a debt management/recovery business and a debt purchase division. Either way, the challenge for any farmer or contractor will be to ensure they deal with someone who has full authorisation to agree a final discharge of the debt based on a handover of assets, cash, or both.

Neither Everyday Finance nor Wilsons Auctions were available for comment.

FCI has urged farmers to be cautious in relation to machinery debt resolution.

“We are urging contractors to examine their options very carefully, to look at the option of asset disposals as a means of resolving outstanding machinery debt issues, but only if that disposal will not impact significantly on the viability of the farm contracting business,” said FCI chief executive Michael Moroney.

Distressed loans

Moroney said FCI will be monitoring the auction of machinery handed over to ensure full market value is achieved.

Some of the agreements involved were taken with Friends First Finance to finance machinery purchase. Friends First Finance closed in 2009. Others were with Lombard Finance. Everyday reportedly purchased €226m of distressed loans from Lombard in 2012, at what was speculated to be up to a 90% discount.

That purchase was in conjunction with CarVal, a so-called vulture fund owned by Cargill, an agri-industry giant and the largest private company in the US.

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