Carroll and wife have personally guaranteed €34m in loans, court told

DEVELOPER LIAM Carroll and his wife Róisín have personally guaranteed loans totalling €34 million to two of his property development groups, according to evidence submitted by his companies.

The couple have guaranteed loans of €10 million from Bank of Scotland (Ireland) to the Zoe group and €24 million to the Dunloe Group to secure loans to repay trade creditors this year.

John Pope, finance director of the Zoe group, has said that it was not factually correct to say that the group’s shareholders were protected from financial hardship.

Mr Carroll has been ill and unable to give instructions in the second petition taken by companies in the Zoe group seeking protection and the appointment of an examiner to devise a rescue plan.

The court was told that the Zoe group has a total annual income of €40 million but has a shortfall of €32 million on its interest bill to the group’s eight lenders.

The group earns rental income of €17 million on commercial properties and €10 million on residential properties, but this total will rise to €30 million when rent-free periods with some tenants end.

A further €10 million is generated from dividends on 29 per cent stakes in each of ferry company, ICG, and food group, Greencore.

The value of the ICG investment has risen by €13.1 million since June 30th last, according to the Zoe group of companies.

Counsel for the seven companies seeking examinership told the court that the group could return to solvency within 15 months.

The group plans to cut interest payments to lenders by selling a further 375 residential units – in addition to 103 units sold this year or on which sale agreements have been reached – over the remainder of the three-year business plan which started last December.

Counsel for the companies argued that they could more than meet their interest bill for the first seven months of 2011 when the rescue plan ends.

The group expects total income to drop from €38.4 million in 2009 to €37.7 million in 2010 and €28.6 million for the first seven months of 2011.

Interest payments will fall from €54.7 million to €37.7 million to €28.7 million for those respective periods as loans are repaid from property sales.