BoI 'has not sold loans of troubled UK firm'
Published 06/08/2010 | 05:00
BANK of Ireland has not sold any loans made to troubled UK housing maintenance group Connaught, a source close to the bank said.
The bank is one of several lenders owed money by Connaught. The Exeter-based company said late last month that it would breach the terms of its loans as net debt was higher than the £120m (€145m) it had previously advised.
Connaught's shares tumbled 69pc this month after the company unexpectedly said it had "an urgent requirement for additional funds to meet the current ongoing needs of the business". Connaught has total bank debts of almost £260m (€313m).
Barclays, one of Connaught's other syndicate of banks, sold its entire exposure of £19m (€23m) for about 37pc of face value to specialist hedge funds earlier this week, the 'Financial Times' reported yesterday. Bank of Ireland is believed to have a similar level of exposure.
Royal Bank of Scotland stepped in last week to help provide a short-term £15m (€18m) overdraft facility after Connaught's urgent request for additional funds. Other syndicate members include Lloyds Banking Group.
Allied Irish Banks, a member of the original lender group, previously sold its loans to another member of the syndicate, the 'Financial Times' reported. A call to the bank yesterday was not returned.
Connaught's shares have lost 91pc this year, giving the company a market value of £44m (€53m).