Decision time for BoSI over €242m loan on Burlington site
Published 19/01/2010 | 05:00
Bank of Scotland (Ireland) (BoSI), a key lender to Bernard McNamara's property empire, must decide whether to renew a giant €242m loan put in place for McNamara's Burlington Hotel site in Dublin 4.
The loan is one of the largest single loan facilities given to a development company and comes due in a fortnight, according to company filings.
Capital or interest payments could become due from next month, although neither party would discuss the status of the loan yesterday.
When contacted by the Irish Independent, a bank spokeswoman said: "It is the bank's policy not to comment on individual clients."
The loan was extended to the company Soltura Limited, where Mr McNamara is listed as a shareholder, along with BoSI itself. Banking sources said they expected the loan to be rolled over for another period. It currently bears an interest rate of between 2pc and 7pc.
Mr McNamara was not available to comment on whether interest on the loan or the loan itself would come due next month.
The last set of accounts for Soltura -- the company which acquired the site -- said the firm had informed its bankers of its financial circumstances.
Mr McNamara himself had also provided the company with funds of €40m, which can be recouped in 2012.
However, the debt of BoSI, which owns less than 20pc of the project, ranks above that of Mr McNamara. The set of accounts said that all non-bank creditors were having their bills paid as they fell due.
The bank has the first legal charge over the property assets held by the company.
The Burlington site was bought for €290m from the Jurys Doyle hotel group in 2007, just as the property market was softening.
The consortium which purchased the hotel -- backed by Mr McNamara -- paid one of the highest prices for land in Dublin ever. Since then, Mr McNamara has installed Tifco, the hotel operator group, to manage the hotel.
Last week, Mr McNamara was hit with a judgment for €62.5m in relation the Irish Glass Bottle site in Dublin's Ringsend. He has said he can not meet these demands at present and has even talked of losing his home in Ailesbury Road, Ballsbridge, Dublin.