Irish Nationwide took an 87 per cent writedown on a loan to a company owned by developer Sean Dunne last year.
Dunne’s Waterside Kilcock Property Company, registered in the Isle of Man, borrowed €38 million from the building society in 2006 to buy the former Zed Candy factory site in Kilcock. The local council gave planning permission for 180 apartments and a 29-store shopping centre on the site, but An Bord Pleanála overturned the permission.
Irish Nationwide was forced to write down the value of the loan to €5 million, a price which most likely reflects what the National Asset Management Agency (Nama) paid for the loan. The 87 per cent haircut would have been one of the biggest on the society’s books, where the loans transferred to Nama at an averaged discount of 72 per cent.
A separate loan of €70 million given to Dunne by Irish Nationwide, to part-fund his purchase of four blocks at the front of AIB bankcentre in Ballsbridge, had to be written down to just €18 million – a write-down of nearly 75 per cent. An Bord Pleanála also ruled against Dunne’s plans to develop that site.
AIB had signalled that it would exercise a break clause it had on the 20-year lease for the four buildings, and the bank was due to vacate the office blocks in four months’ time. Most AIB staff are based in new buildings at the back of the bankcentre.
However, the bank has signed a new five-year deal with the landlord at a much lower rent, The Sunday Business Post has learned. The bank may save money by moving staff into Bankcentre from other locations around Dublin. Ulster Bank provided the rest of the funding to Dunne when he bought the AIB blocks for €207 million. AIB’s new deal should boost the value of the buildings, which would otherwise have stood empty after July.
Monday, March 21, 2011
Irish Nationwide loses out on Dunne loans | The Post