McEnaney Construction goes into receivership
23 January 2011A building firm that was rescued from examinership three years ago has been put into receivership by the National Asset Management Agency (Nama) and Ulster Bank.McEnaney Construction, which is controlled by developer John McCann, has debts of almost €75 million.
Nama has taken over the company’s debts to Irish Nationwide and made a joint move with Ulster Bank to appoint Tom Kavanagh of Kavanagh Fennell as receiver in recent days.
The Co Louth building firm announced plans in 2006 to build the M1 Euro Park, a €200 million development on a 90-acre site outside Dundalk.
However, it ran into financial difficulties the following year, and went into examinership at the end of 2007.
McCann backed a rescue package that involved him taking a 75 per cent stake in McEnaney Construction, while Sean McEnaney, its founder, was left with a 25 per cent stake.
In 2009, the company was reported to be seeking a new investor and trying to sell off sites and investment properties.
As well as the site for theM1 Euro Park, which is still undeveloped, its assets include completed projects in Balbriggan in north Dublin and an unfinished housing development in Carrickmacross, Co Monaghan.
The latest accounts for McEnaney Construction show that it had more than €74 million in outstanding loans at the end of April 2009.
However, only a term loan from Permanent was repayable on an annual basis.’ ‘All other loans are repaid when sites or developments are sold," said the accounts.
The company valued its stocks at almost €69 million, but had a deficit of €6 million on its balance sheet at the end of the financial year.
The directors of the firm said they were confident that it would continue in business, ‘‘based on assurances made with the company’s bankers’’.
However, they warned that ‘‘the ultimate outcome is dependent on banking co-operation and on the global economic climate becoming more optimistic, resulting in profitable disposals of the company’s stock and work in progress’’.
The accounts were signed on March 18, 2010, before Nama took over the loans from Irish Nationwide.
McCann has an address in Crossmaglen, Co Armagh, but is understood to be based in Switzerland.
His main business is Castleway Developments, which is involved in property development and investment in Ireland, Britain and America.
It was set up in 2003, and claims to have a property portfolio worth €250 million.
The company’s properties include the Xerox Technology Campus in Dundalk, the Orion Business Park in Blanchardstown in Dublin and a business park in Co Antrim.
It also owns the Killin Park Golf Club in Dundalk and a business park in Philadelphia in America.
A year ago, Bank of Ireland appointed a receiver to McCann’s Broadway Capital, which controlled the €80 million Ropewalk Shopping Centre In Warwickshire.
Monday, January 24, 2011
McEnaney Construction goes into receivership | The Post
Former steel site has cost taxpayer €50 million | The Post
Former steel site has cost taxpayer €50 million
23 January 2011The state has spent €50 million clearing hazardous waste from the former Ispat Irish steelworks site in Cork harbour - almost twice the original estimate.Documents obtained by The Sunday Business Post also reveal that the state has agreed to pay a €1.8 million settlement to a company that was contracted to clean up the site.
The state is also expected to pay an estimated €378,000 in legal costs in addition to the settlement with Hammond Lane Metals Company, following a row over unpaid invoices for remedial work at the Haulbowline site.
The revelations are contained in briefing documents prepared for Geraldine Tallon, secretary general at the Department of Environment prior to her appearance before the Da¤ il’s spending watchdog, the Public Accounts Committee. According to the documents , an ‘‘unforeseen problem arose as a result of the ongoing site surface clearance and related to the uncovering and excavation by the contractor of a sub-surface sludge pit of hazardous waste’’.
They continued that, ‘‘owing to the potential extent and nature of the buried hazardous waste, [and] the extent of the minimum works required to remove the risk of environmental pollution remaining unclear . . . the contractors were instructed to stop all extraction of the undisturbed buried material’’.
‘‘Despite repeated instructions to stop these unauthorised works, including from the Chief State Solicitor’s Office . . . the contractors continued to excavate significant volumes of undisturbed buried hazardous material," said the documents, obtained under the Freedom of Information Act.
It was previously known that the company had sued environment minister John Gormley, claiming that it was owed a significant sum of money.
This happened after the minister terminated a contract with the company, which had been hired in 2007 to conduct the surface clean-up at the site.
The firm sued the state for almost €8.1million.
Irish Ispat went into liquidation in 2001, and the state took custody of the site, leaving the exchequer responsible for a site investigation to decide if remedial action was needed. Examinations have found that there is no obvious threat to human or marine welfare.
However, the National Cancer Registry figures for 1994-2005 showed that nearby Cobh had cancer levels 44 per cent above the national average.
The NCR data was published in 2009. Former minister for health Mary Harney ruled out a health baseline study in the area, despite calls from local politicians, according to the documents.
The European Commission has also written to the Department of Environment, insisting that the site should have the correct waste permit to allow continued remediation of the former steelworks.
This followed a High Court ruling that the integrated pollution control licence granted to Irish Ispat was not valid.
Only five pubs sold in Dublin last year | The Post
Only five pubs sold in Dublin last year
23 January 2011Only five pubs changed hands in Dublin last year, with values reaching a new low as investors and banks went cold on the sector.The total value of deals was less than €5 million, compared with €180 million at the height of the market in 2006 – when 37 Dublin pubs changed hands.
The low value of the transactions was partly because three of the sales in 2010 were for leasehold interests, not for the premises themselves. Auctioneers Morrissey’s said that the total value of transactions fell from €34.55 million in 2008, to €22.1 million in 2009 and €4.85 million in 2010.
The average price for a pub was just under €1 million last year, down from €4.4 million in 2009. One of the five pubs which changed hands was Pravda in Dublin 1. It was taken over by businessman Brian Montague who reopened it in October as Grand Social.
He also bought the nearby Winding Stair restaurant and bookshop, as the three businesses were being sold in a package after the Thomas Read pub group went into receivership in 2009.
Pravda was sold by Morrissey’s on behalf of Martin Ferris, the receiver for the Thomas Read Group, as was Ron Blacks on Dawson Street.
The other three pubs sold last year were the Parnell Mooney on Parnell Street, Residence on St Stephen’s Green and The IN in Dalkey. However, prices paid for licences increased slightly throughout 2010, mainly due to a reduced supply of licences available for transfer.
These are mainly bought for off-licences. Values rose by around €35,000 throughout the year, with prices in December ranging from €75,000 to €85,000, but still a long way off their peak of €175,000 in 2007.
Bill Morrissey of Morrissey’s said the optimism this time last year had proved to be unfounded.
‘‘The expectation that the market was bottoming out with green shoots on the horizon by the end of quarter one did not materialise. The challenge for the licensed trade throughout 2010 was again to continue to reduce operational overheads and, at the same time, maintain volume of trade," he said.
Potential sellers and buyers found it difficult to gauge ‘maintainable turnover’, given uncertainty surrounding the pub trade which made it difficult to calculate valuations. Prices paid at the close of the year ranged between 1.5 and 2.5 times’ net turnover, compared with 1.75 to three times’ net turnover in 2008/2009.
Less than 1 per cent of the Dublin market changed hands for the third year running, compared with the ten-year average of around 2.65 per cent.
The market trends seen in Dublin were mirrored in the rest of the country. But Morrissey said that the rural market was harder hit than cities and large towns, with continued reports of pub closures – the bulk of which were in sparsely-populated districts.
House prices to fall for two more years | The Post
House prices to fall for two more years
23 January 2011House prices will fall for at least two more years as people focus on reducing their debts rather than investing, a leading analyst at Merrill Lynch has predicted.
‘‘It will be 2013 before the housing sector in Ireland will really begin to see meaningful signs of recovery," said Bill O’Neill, chief investment officer at the company’s wealth management unit in Europe Middle East and Africa. ‘‘The housing sector will be constrained for an extended period of time, there’s no doubt about that."
O’Neill said that people would be dealing with ‘‘the largest downturn in living memory’’ for several more years.
He predicted that the ‘‘period of deleveraging’’ - when consumers are more focused on reducing debts than spending money - would last up to five more years. By that measure, the downturn will last as long as the economic boom lasted.
‘‘From the point of view of asset prices and real wage growth, there are four to five years to go in the deleveraging story," said O’Neill, a Trinity educated economist who is based in London.
‘‘Deleveraging cycles tend to take about six to seven years, which would fit in with the length of the bubble cycle for Ireland, from 2001 to 2008."
However, he said there were signs that the downturn could be shortened by an export-led recovery and falling costs in the economy.
‘‘A substantial part of the competitiveness that was lost during the crazy period of the bubble has been clawed back.
You’ve got an incredibly flexible labour market, you’ve got very strong FDI, and it’s extraordinary the extent to which wages are deflating," said O’Neill,. He described the recent investment announcement by Int el as ‘ ‘ve r y important’’.
He said that the target of 2.75 per cent economic growth in the government’s four-year plan was ‘‘credible and sustainable’’ based on the strong performance of exports.
He also raised the possibility that the timeframe for Ireland’s bailout from the IMF and EU could be revised, resulting in lower payments but over a longer period.
‘‘The term [of the bailout] is a very important and a very neglected issue," O’Neill said. ‘‘I think there will be flexibility in the term and that refinancing will come as the term is extended."
However, he warned that Things would ‘‘get worse before they get better’’ in the eurozone.
‘‘There will be a need for further bold measures in the next year," he said.
Mortgage rates ‘could hit 5% by end of year’
Mortgage rates ‘could hit 5% by end of year’
23 January 2011Rates on standard variable mortgages could hit 5 per cent by the end of the year, a leading Dublin mortgage broker has warned.Michael Dowling predicted that the banks would continue pushing up rates this year, even if the European Central Bank held base rates steady at 1 per cent.
About 300,000 mortgage holders have standard variable rate mortgages, leaving them vulnerable to rate hikes as the banks seek to rebuild their badly damaged balance sheets. It emerged last week that Permanent TSB was to raise its variable interest rate by 50 basis points from next month.
This means that the standard variable rate payable by Permanent TSB borrowers will amount to 4.7 per cent. It is feared that other lenders could follow Permanent TSB’s lead.
Permanent TSB pushed up variable rates three times in a period of 14 months.
When the latest increases are factored in, it means that the lender has added 200 basis points to the cost of a mortgage, at a time when the ECB has left the base rate unchanged at 1 per cent.
Dowling said he feared there could be worse to come.
He pointed out that an increase in the average standard variable mortgage to 5 per cent would bring repayment s on a €200,000 mortgage up to €1,075 a month, compared with €955 a month when rates were at 4 per cent.
The Permanent TSB hike comes at a time of reduced pay and higher taxes. ‘‘It is the tipping point for a lot of people," Dowling warned.
Dowling also warned about growing evidence of members of the Garda Síochána under financial strain. He said a number of gardaí were ‘‘under phenomenal pressure’’ due to large debts incurred for property investments.