DEVELOPERS RAY and Danny Grehan have until the close of business tomorrow to repay debts of €650 million owed by their Glenkerrin Group or Nama will place the group back into receivership.
At midnight on Friday, the State assets agency stood down the statutory receivers that had been appointed to Glenkerrin earlier in the week. Control of the properties was returned to Glenkerrin on Saturday morning.
A spokesman for Nama said the agency had acceded to a request from Glenkerrin for additional time to respond to Wednesday’s developments. The agency’s decision was also based on legal advice. However, the brothers have just one working day to raise the funds to repay the debt before the receivership is reinstated.
The Nama spokesman said the receivers, Paul McCann and Michael McAteer of accountancy firm Grant Thornton, would be reappointed tomorrow evening if the debts were not repaid.
Nama appointed the receivers on Wednesday to Irish properties owned by the Grehans and their Glenkerrin group in a bid to recover a €650 million debt owed to the State.
The properties include the former UCD veterinary college site in Ballsbridge, Dublin, which Glenkerrin bought for a record €171.5 million in 2005. Glenkerrin also developed The Grange, a luxury apartment complex in Stillorgan, Co Dublin.
The agency normally appoints receivers where it has failed to agree a business plan outlining how the developers intend to repay their debts.
Nama and the Grehan brothers signed a memorandum of understanding containing the terms of such a plan last December. However, it is understood that the developers did not meet some of the terms agreed in that document, and Nama subsequently decided to take control of their properties.
It is also set to ask the British courts to appoint an administrator to a number of properties that the Grehans own in London.
Ray Grehan said Glenkerrin had sought finance from Nama to complete an extension on its Crowne Plaza Hotel in Shoreditch in east London when the agency appointed a statutory receiver.
“We were surprised by the aggressive move by Nama because we were finishing out an extension on a hotel in the UK and we had a buyer for the hotel,” he added.
Mr Grehan said Nama had approved the company’s business plan and he had signed the memorandum of understanding to work with the agency to implement the plan.
He believed Nama could recoup the money paid to the banks for Glenkerrins loans as it had a number of assets in the UK where the market was still buoyant.
Glenkerrin’s debts are due to a number of Irish banks, including AIB, which was the main lender in the veterinary college deal.
If the receivers and administrators cannot recover the full €650 million, the Grehans and Glenkerrin will be liable for the balance.
