Cubic Telecom, a successful Irish mobility technology company with backers and customers around the world, finds itself in an awkward situation where the shares held by its most senior executive and single largest shareholder are frozen under personal debt enforcement proceedings. 

With offices in Dublin, Detroit and Tokyo, Cubic Telecom develops software to let vehicles as diverse as cars, drones and tractors exchange data wirelessly with their owners and manufacturers. The privately-held company is well placed to play a major role in the electric and autonomous vehicle revolution and it has raised around €110 million from investors including the Volkswagen Group through Audi, Californian semiconductor giant Qualcomm, Brazilian cybersecurity firm Valid, Irish venture capital fund Act and state agencies ISIF and Enterprise Ireland.

None of these shareholders, however, own more of Cubic’s share capital than its chairman, chief executive and company secretary Barry Napier. The serial tech entrepreneur holds 27.9 per cent of Cubic Telecom, nearly all through his majority stake in a holding company called BPI Telecom and its parent Celtic Telecom Consultants.

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On July 28, however, High Court Judge Tony O’Connor appointed AIB’s solicitor Peter Kelly of AC Forde & Co as receiver over all shares legally and beneficially owned by Napier in six companies including Cubic Telecom and Celtic Telecom Consultants.

Justice O’Connor made the order on foot of an affidavit from AIB claiming that the bank had obtained a judgement for €1 million against Napier on June 14 “and that said judgement remains entirely unsatisfied”.

As a result, all his shares now stand charged until he pays his debt to AIB and the Companies Registration Office has placed the judgement on the public record of the six companies involved.

AIB already owned 1.5 per cent of Cubic Telecom through an investment made by its start-up fund. After appointing a receiver to Napier’s stake, the bank is de facto in control of nearly 30 per cent of the company.

According to its last accounts published for 2019, Cubic Telecom doubled revenues to €38.3 million and became profitable on an operating basis, returning €5.2 million Ebitda. It had no debt until it started drawing down €7 million from a €23.5 million credit facility with the European Investment Bank last year. 

This arguably makes Napier’s stake worth a lot more than €1 million and it is hard to see AIB take a wrecking ball to Cubic Telecom to recover the funds owed by its chief executive. The high-profile move, however, applies pressure on him under the eyes of his co-investors in the company, including executive colleagues such as chief commercial officer Gerry McQuaid and chief operations officer Shane Sorohan.

Pubs in Enniskerry and Dalkey

The four other companies targeted by AIB’s enforcement action shed some light on Napier’s debt woes. The High Court order also grants the bank-appointed receiver security over his shares in Chiffdale Ltd, Ten-Bar Ltd and Doonbar Ltd, which he co-owns with his wife Andrea, and Eleven Bar Ltd, in which he has a 90 per cent stake.

While Chiffdale is a new company registered last September just before Napier’s row with AIB landed in the High Court, the other vehicles are all in liquidation. Napier used them to invest in hospitality interests in the years preceding the financial crisis.

Doonbar and Ten-Bar are holding companies that purchased Glenwood Inn Ltd along with the pub, restaurant and guesthouse of the same name in Napier’s home town of Enniskerry, Co Wicklow. Company filings show that the Napiers borrowed from AIB to finance the deal in 2003, before they renamed the business the Enniskerry Inn. 

Three years later, they bought McDonagh’s pub in Dalkey, Co Dublin through Eleven Bar. Filings show this acquisition was funded with debt from Permanent TSB, but AIB has now gained security over that company, too.

Not that any of these vehicles are worth much today – Napier sold both pubs in 2016 and they now operate under different owners. When it last filed accounts in 2018 after disposing of its business, Ten Bar, the vehicle used to finance the Enniskerry deal, had virtually no assets left but still owed the bank €2.6 million.

Following the sale of the Dalkey pub, Eleven Bar did not fare any better, with again just a few thousand euros in assets but €2 million owed to credit institutions and another €1.1 million to related Napier companies.

All hospitality companies went into liquidation last October, weeks before AIB issued High Court proceedings against Napier.

With no hope of recovering any funds from the liquidator, the bank then turned its attention to the most valuable asset in Napier’s portfolio: his stake in Cubic Telecom.