ANALYSIS: A firesale of a near-complete hotel and land could complicate Nama valuations
IT TOOK a High Court judge last week to declare that one of the largest property development groups and borrowers in the country had no chance of survival.
Yesterday it was the turn of the borrower, hotelier and property investor Hugh O’Regan to concede that three of his companies had no prospect of being saved.
Last week’s ruling in the case of the insolvent Zoe group of companies is being appealed by its owner, developer Liam Carroll.
The Supreme Court hearing, which takes place on Tuesday, if successful, could lead to a flood of further applications by developers and property investors seeking protection from aggressive lenders demanding repayment of loans.
For Carroll, a threat by Dutch-owned ACCBank precipitated his action. In O’Regan’s case, it was State-owned Anglo Irish Bank.
Last month the lender sought the repayment of loans totalling almost €27 million secured on two investment properties – a vacant building on Parliament Street in Dublin, once home to the city’s oldest shop, Thomas Read’s Cutlers, and the former Hibernian United Services Club on St Stephen’s Green, which O’Regan planned to open as a private club.
Anglo’s appointment of a receiver a fortnight ago prompted O’Regan to rush to court in an emergency Sunday morning application on July 26th not just to try to save the two companies behind the Dublin properties – Thomas Read Holdings and Clubko – but to protect a much bigger project.
A third company, Dashaven, was redeveloping the Kilternan hotel and sports club in south Co Dublin with borrowings of €171.5 million from Irish Nationwide.
The building society had signalled its intention to finance the completion of the project with a further loan of €10.5 million in a refinancing deal totalling €180 million including his existing loans.
O’Regan secured temporary protection from Anglo Irish and its earlier appointment of a receiver to the two Dublin city properties.
However, Irish Nationwide objected to the appointment of an examiner, and withdrew its loan offer to finish the Kilternan resort.
Without any external investment, this extinguished any hope of saving the companies.
O’Regan chose the liquidation route instead and the court consented.
Rossa Fanning BL, for Anglo, described the reversal as "a truly remarkable volte face".
Anglo Irish and Irish Nationwide have each appointed receivers to seize and sell the properties backing their loans, which total almost €200 million across the three companies. Anglo is owed more than €50 million by O’Regan through further company and personal loans, bringing his total indebtedness to the two lenders to over €250 million.
Ulster Bank is understood to be owed €1.8 million on the Kilternan project, which comes with about 330 acres of mostly agricultural land that O’Regan amassed with the loans from Irish Nationwide.
These borrowings are classed as development and, given the scale of the loans, are likely to be moved first into State “bad bank” Nama.
A firesale of a 90 per cent-complete hotel resort and 330 acres of land in south Dublin in an attempt to recoup some of the €171.5 million in loans could complicate the State’s already complex valuation mechanism on Nama-bound loans.
