BECBAY, THE company behind the disastrous €411 million purchase of the Irish Glass Bottle Site, in Ringsend, Dublin, in 2006, wrote off €452.8 million in its 2008 financial year, according to accounts just filed.
The 25-acre site, which is the company’s sole asset, was given a valuation of €50 million in the accounts.
The directors, in their report accompanying the accounts, dated May 13th, 2010, say the company’s loans are to be transferred to the National Asset Management Agency (Nama), but that it has not yet had any contact with the agency concerning its future financing.
“It is unclear as to the terms on which Nama may continue to finance the working capital requirements of the company in the future,” they state. “The directors have not had any direct discussions with Nama in this regard.”
The report is signed by Bernard McNamara and Derek Quinlan, two of the major shareholders in the company. The third major shareholder is the Dublin Docklands Development Authority (DDDA). The accounts show that during 2008 the authority loaned €6.9 million to the company.
Donatex, Mr McNamara’s company, loaned €3.7 million, while Mempal, Mr Quinlan’s company, loaned €5.4 million.
The shareholdings in Becbay are: Donatex (41 per cent); Mempal (33 per cent) and DDDA (26 per cent).
Investors, organised through Davy Stockbrokers, who put money into Donatex have successfully sued Donatex and Mr McNamara. Donatex is currently preparing a case against the DDDA, seeking €100 million in damages.
Following judgment being awarded against him, Mr McNamara told the courts he has no unencumbered assets.
The consolidated accounts for Becbay and its subsidiaries show it suffered a loss of €452.8 million during 2008 and had a deficit in shareholders’ funds at year’s end of €452.8 million.
The directors state they have not had the Ringsend site valued, but are aware of a valuation for the DDDA which supports their “best estimate”. They note the limited market for the site.
All the company’s financing arrangements are due on demand, according to the directors, who said they are in ongoing discussions with their finance providers and shareholders. “The directors await the implications to the company of the transfer of the underlying loans to Nama.”
They say that over the coming months they expect to agree a strategy with Nama for the underlying finance of the site.
Interest during the year was €24.8 million, the accounts show. Expenditure on work in progress was €24.8 million. The site requires extensive and expensive cleaning before it would be suitable for development.
Bank loans at year’s end were €322 million and there was an overdraft of €6.7 million. During the year loans of €28.5 million were drawn down. Loan stock from shareholders was €138 million. A loan of €101,869 was repaid to Mr McNamara.
In a recent report published by the DDDA it was disclosed that while the authority’s exposure to the Becbay loans was in proportion to its shareholding, its exposure to interest payments on the company’s loans was not limited and nor was its exposure on cost overruns.
Loans other than those associated with Becbay and involving both Mr McNamara and Mr Quinlan have been moved to Nama. The DDDA is paying €5 million a year in interest to Anglo Irish Bank, the major funder of the Becbay operation.
“The authority is incapable of operating on a break-even basis with this annual liability,” the DDDA board said recently.
