Gannon confident €30.5m owed to Nama will be repaid

One of the State’s best-known builders, Gerry Gannon, is confident that the £24.9 million (€30.5 million) owed to Nama by his business’s British arm will be repaid.

In accounts just filed by London-based Gannon Homes (UK) Ltd, profits at the firm increased 17-fold to £359,929 in 2011. A note attached to the accounts states: “The directors are of the opinion that all loans can be repaid as and when the market returns to enable the completed units to be sold.”

The note continues: “In the meantime, the directors are confident that rental income and income from property management services provided by the company will generate sufficient positive cash-flow to enable the company to meet a substantial portion of its funding requirements.”

The accounts show that during 2010, the company’s loans were transferred by the Irish Bank Resolution Corporation to Nama, with bank loans of £24.9 million outstanding at the end of 2011.

Gannon Homes

The most recent accounts for Mr Gannon’s Irish-based Gannon Homes Ltd, for 2009, show €196.7 million in loans provided by AIB, Anglo Irish Bank and Irish Nationwide Building Society had been transferred to Nama. The firm’s bank loans and overdrafts are supported by a personal guarantee from Mr Gannon.

“Nothing has been formally agreed by Nama in relation to the renewal of the facilities and, on that basis, the loans are technically repayable on demand and reflected as such in the financial statements.”

Book value

The accounts give a book value of stocks and works in progress of £18.3 million. An attached note says the directors “anticipate that the stock of properties will, in the medium term, realise more than their current carrying value and that Nama will continue to support the company until this is achieved”.

The filings show Mr Gannon has advanced loans to the firm and was owed £2 million at the end of 2011. The company was charged management fees of £50,000 by Gannon Homes Ltd, down from £265,000 in 2010.