AIB calls in €28m worth of loans owed by Spawell centre
Published 11/02/2010 | 05:00
Allied Irish Banks (AIB) has called in up to €28m in loans owed by a company jointly controlled by high-profile developer Frank Gormley, the founder of Howard Holdings.
Wellington General Partner, the company that owns the Spawell golf and leisure complex in Templeogue, Dublin, owed AIB more than €28m at the end of 2008, having acquired the property in 2006.
Wellington planned to redevelop the site and recently submitted an application to the local council to renew planning permission for a hotel and new leisure centre, although there are no immediate plans to proceed with any works.
Wellington recorded a loss of €12.1m in the year to the end of April 2008 after it shouldered an impairment charge of nearly €10m on the Spawell property. The property was subsequently being carried at a value of €32m.
Accounts just filed for Wellington note that it has received a formal demand from its bank for repayment of the loan made to the company, but that Wellington's directors "remain hopeful" that the loan facilities can be renegotiated on terms acceptable to the company.
"The directors have been engaged in ongoing discussions with the bank in this regard," noted the accounts, while adding that there was a "material uncertainty that may cast doubt on the company's ability to continue as a going concern."
The accounts also revealed that Wellington did not make a payment of more than €13.6m due last October in relation to the company's acquisition of the Spawell centre.
Negotiations began with creditors in an effort to "seek payment terms for the discharge of this liability", according to the accounts.
Among those owed money are John and Peter Kennedy, both directors of Wellington, who originally owned the Spawell property. They are each due deferred consideration of €4.5m. One of their investment vehicles retains equal control of Wellington General Partner with Mr Gormley's Thira Property Management firm.
Mr Gormley sold his stake in Howard Holdings in 2006 for about €500m and is no longer linked with the company.
He chairs Howard Eurocape, which he also founded, and which has property interests in Ireland and other countries such as South Africa.
Grainne Hollywood, managing director of Howard Eurocape, declined to comment on Wellington General Partner's financial position or negotiations with AIB when contacted yesterday by the Irish Independent.
She would not divulge whether attempts to renegotiate Wellington's loan with AIB had been successful or if those talks were ongoing.
A separate company controlled by unrelated individuals that held a contract to operate a bar at the Spawell complex ceased trading last August, resulting in the loss of 32 jobs.