McCanns’ Balmoral settles Cerberus debt at 16% discount

Balmoral International Land, the property company spun out of tropical fruits group Fyffes in 2006 and controlled by the wealthy McCann family, has secured a 16 per cent discount settling about €57 million of debt owed to US investment firm Cerberus, following a legal stand-off.

The terms of the settlement, agreed in March, are contained in Balmoral’s annual report for 2021, published on its website in recent weeks. It ended a legal dispute that began in late 2020.

The annual report said that Balmoral has paid €48 million, inclusive of various costs, to settle the debt owed to Everyday Finance, a debt servicing firm used by Cerberus to manage the loans on a day-to-day basis. That equates to about 84 per cent of the total of about €57 million that was owed, including £20.2 million (€23.6 million) of sterling-denominated loans.

The settlement was funded from cash and the equivalent of €43.9 million of new facilities from Bank of Ireland, which are secured over certain group assets and due to be mature in three years.

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The Cerberus liabilities were what remained of an original €300 million facility Balmoral agreed with AIB in 2007 and which was acquired by Cerberus in January 2020 as part of a broader loan portfolio transaction.

Court proceedings

Everyday Finance, on behalf of Cerberus, launched court proceedings in late 2020 claiming Balmoral did not meet its obligation to repay the loans on demand by the end of 2019.

Balmoral said repeatedly – including in the annual report, after the settlement had been struck – that the alleged repayment obligation did not exist within the facility agreement. “These proceedings were fully defended by Balmoral International Land Limited and, in March 2022, Balmoral International Land Limited concluded a settlement with Everyday Finance,” it said.

Balmoral is 59 per cent owned by investment vehicles controlled by members of the McCann family who were synonymous with Fyffes before the latter group's sale in 2017 to Japanese conglomerate Sumitomo. These include the group's chairman, Carl McCann.

The company’s net assets rose by €21.4 million last year to €127.7 million, driven by increases in values of its logistics and warehousing properties during the year in Ireland and Britain.

Industrial and warehousing assets accounted for 68 per cent of its property portfolio as of the end of December, with 16 per cent office and 16 per cent mixed use.

The group’s gross rental and related income of amounted to €8.8 million last year, derived 60 per cent from Ireland and 40 per cent from Britain.

Fyffes and a former sister company, Dole plc, the result of a merger last year between Carl McCann-chaired Total Produce and Dole Food Company, accounted for 45 per cent of the group's rent roll.