HOUSE-BUILDER McInerney’s bid to reach a deal with its banks over guarantees that it has broken is taking longer than the company originally predicted.

McInerney has been in breach of covenants – terms – of its loan agreements with two syndicates of banks since late November, and has been in talks with these institutions since mid-way through last year.

In November, the company said it expected talks with these bankers to have a “positive outcome” by next March, when the company will publish its results for 2009. However, yesterday McInerney said the talks were taking longer than anticipated.

McInerney has broken two guarantees given to cover loans to the company. The first was that it would meet certain sales targets, which it has failed to do as the housing markets in its two main territories, Ireland and Britain, have collapsed.

The second was that it would maintain a certain net worth relative to its liabilities. It has been unable to fulfil this as it has been forced to write down the value of its land banks in both countries.

At the end of last June, it cut its estimate of the value of those assets by €156 million. Overall, the value of its Irish land bank has halved in the last two years, while it has taken 40 per cent off the worth of its British properties. McInerney’s net debts at the end of June came to €254 million.

The company blamed the “diversity” of its banking facilities across Ireland and Britain for the delay. McInerney’s principal sources of credit are two syndicates of banks on either side of the Irish Sea.

They include State-owned Anglo Irish Bank, Bank of Ireland and IIB. The company has already said it is likely that its loans will end up in Nama, the State’s bad bank, as they are largely property related. However, the company will still have to meet all its obligations under the loan agreements.