A PROPERTY company linked to the Caulfield McCarthy supermarket group and Frank Gormley of Howard Eurocape came under pressure last year after banking covenants were breached on debts incurred by its parent.
Accounts filed to the Companies Office show that auditors to Caulfield McCarthy Group (Holdings) Limited said the company was subject to “material uncertainties” at the end of March last year.
The auditors, KPMG, highlighted guarantees that the firm had given in respect of the €84 million borrowings of its parent, HCJV, a holding company, and said certain bank covenants had been breached.
The auditors said: “The group is currently dependent on continuing support from its bankers,” and recommended the calling of an extraordinary general meeting of the company.
Caulfield McCarthy Group (Holdings) is controlled by HCJV, which is in turn owned by two companies: Caulfield Group Property Limited and Castleshine.
Caulfield Group Property is owned by John McCarthy, Anne-Marie Caulfield, Thomas Caulfield and Jerome Kennedy of the Caulfield McCarthy supermarket group, which operates a chain of SuperValu stores in the south and east. Castleshine is controlled by veteran developer, Mr Gormley.
The two parties came together in late 2006 in a deal aimed at redeveloping Caulfield McCarthy’s portfolio of seven retail sites and look at additional opportunities. The sites included the HyperCentre in Waterford and the Riverview Centre in Bandon, Co Cork.
Caulfield McCarthy Group (Holdings) had a loss of €2.7 million in the year to the end of March last. At that stage, its liabilities exceeded its assets by almost €2 million.
HCJV meanwhile had a net deficit on shareholders’ funds of €62.3 million and bank borrowings at €84.2 million at the same point. The breach of covenants on these borrowings meant that they were “now technically due on demand”, according to a note to the Caulfield McCarthy Group (Holdings) accounts.
The accounts also state that the loan repayment date for the HCJV loans has been renegotiated to the end of 2010.
“The ability of the company to continue operating as a going concern is dependent on the continued availability of bank financing to HCJV,” the accounts note. The directors added that they expect existing bank facilities to continue to be available until 2011, while acknowledging the “difficulties” in the property market.
Accounts for HCJV meanwhile note the dealing with bankers has become more difficult as negotiations over the National Asset Management Agency (Nama) proceed.
“However, rollovers and renewals continue to be completed,” the note continues.
