Bank no longer a creditor of Taggart

BANK OF Scotland Ireland (BOSI) is no longer a creditor of the troubled Taggart group as a result of the sale of the one of the developer's British subsidiaries.

BOSI financed Taggart's €100 million purchase of Hartlepool-based house builder Cecil M Yuill in early 2006, and secured its debt against the issued share capital of the English business.

Most of the Belfast-based Taggart building and development group was placed in administration in Northern Ireland and in receivership in the Republic earlier this week, at the request of Bank of Ireland and Ulster Bank.

On Wednesday, Newbridge Enterprises, which is 50 per cent owned by BOSI, bought Yuill Homes. Its management, led by managing director David Mullins, owns the other half of Newbridge.

The Irish Times understands that the move resulted in the bank's debt being restructured as a stake in the building company. This means Taggart's debt to the bank has been cleared, and that the bank is no longer a creditor.

Yuill issued a statement announcing the deal on Wednesday night, but yesterday refused to comment further on any aspect of the sale.

Taggart is said to owe €150 million to Ulster Bank and Bank of Ireland, but sources have suggested that this only represents a portion of its overall debts.

The company's 2006 accounts, the last year for which figures are available, show that at the end of that year it owed a total of £110 million (€138 million) to the banks.

The accounts state that "a lender" has a debenture - a mortgage secured on company assets - from Taggart North East UK Ltd, which incorporates a charge over Cecil M Yuill's share capital. It is understood that the lender referred to is BOSI.

A leading Northern Ireland businessman warned yesterday that the collapse of Taggart could leave the region's construction industry in "meltdown". Brendan Cunnane, secretary of local lobbying organisation the Construction and Property Group (CPG), said the failure of Taggart meant the end of the road for many other building firms, and pointed out that the industry in the region was effectively in the banks' hands.

"I would say that over half the developers in Northern Ireland are waiting for a call," he said.

The CPG has been lobbying members of the Northern Ireland Assembly to support the industry, where it says jobs are being lost every week. Last month it called on members to put aside political differences for the sake of the local economy.