Conlan gave personal guarantees of €127.5m on AIB loans
Bank gave total of €313m to developer and his companies
Published 23/04/2011 | 05:00
Kildare property developer Gerry Conlan, whose empire includes the Mount Carmel Medical Group, which owns private hospitals in Dublin, Sligo and Kilkenny, gave AIB a €127.5m personal guarantee against his loans.
Information given to the Commercial Court showed that at the height of the property boom, AIB lent €313m to Mr Conlan and companies connected with him. The court heard that Mr Conlan now "has no money".
This massive personal guarantee is listed as part of the security he gave to AIB for loans taken out by his main property development firm, Quinby Properties, which itself had loans of €162.8m at the end of 2009.
Some of these loans have since been transferred to the National Asset Management Agency (Nama).
In notes to its accounts the company said its ability to continue as a going concern is based on Nama's acceptance of its business plan and the willingness of foreign-owned banks that are not affected by Ireland's bad bank to continue to lend the company money.
Quinby Properties is a subsidiary of Quinby Holdings, the company that controls many of Mr Conlan's other ventures, including Mount Carmel Hospital in Dublin, St Joseph's hospital in Sligo and the Aut Even Hospital in Kilkenny.
At the end of 2009 these companies owed €63m to Quinby Properties.
Apart from the personal guarantee, the bank also took a charge over a range of properties and development sites Mr Conlan owns in Ireland.
In addition, the company has borrowed money from Anglo Irish Bank, which took a legal charge over 18 apartments at Haddington Road, Dublin, owned by Mr Conlan, that it can take if the loans cannot be repaid.
Other parts of Mr Conlan's empire have also found the going tough in recent years. The last accounts filed for the Mount Carmel Medical Group reported a €29m loss at the end of 2008 and took a €40m write-down on the south-Dublin hospital it bought from the Little Company of Mary Sisters in 2006.
Mr Conlan's company is believed to have paid about €60m for Mount Carmel Hospital.
That company had bank loans of €11.7m and other extensive borrowings from shareholders that include a director's loan of €25m from Mr Conlan.
The company said in those accounts that it had been unable to meet the capital repayments on its bank debt that were due at the end of December 2009 and was in discussions with its banks to arrange ongoing finance.
"The company is dependent on the continued support of its bankers," it stated.
Another related company, Mount Carmel Medical Group Properties (south Dublin), which owns the lands and building of Mount Carmel Hospital, made a €15.75m loss at the end of 2008.
This company has loans totalling €50m and defaulted on some of its bank debt during that period, according to its accounts.
It was in negotiations with its banks and was reliant on them to continue to support this company, it said.
AIB has a charge over the land and buildings of Mount Carmel Hospital, which it can take if the loans aren't repaid.
The company that controls Aut Even Hospital posted a 2008 pre-tax loss of €1.7m despite revenues increasing by 22pc to €16.5m.
St Joseph's Hospital posted a loss of €1.5m in 2008, bringing accumulated losses to €3.5m.
Mr Conlan is one of the so-called Anglo 10, a group of the bank's top customers rounded up by former chief executive David Drumm to buy Sean Quinn's stake in a last-ditch effort to stop it imploding. Anglo lent this group €451m to buy the bank's shares.