Dunne's personal guarantees to his empire hit e100m
Holding company admits group is 'dependent on bankers'
Published 09/01/2010 | 05:00
SEAN Dunne's personal guarantees to his property development empire have shot up from €4m to more than €100m after the property developer stepped in to secure several loans that fall to his main holding company DCD Builders.
The Carlow man's mounting exposure is charted in accounts just filed for DCD and came as massive writedowns pushed the company to a loss of almost €270m for the year ended July 2008.
The hefty loss left DCD with a shareholders' deficit of almost €240m at year-end, prompting its directors to admit that the group was "dependent on continuing support from its bankers" in order to keep trading.
Those bankers are owed more than €760m, while Mr Dunne personally is owed another €170m which he has agreed not to seek repayment of until December 2010 at the earliest.
The stark picture of DCD's finances emerges a year after Mr Dunne's planning application for his ambitious Ballsbridge development, including a 37-storey tower, was shot down by An Bord Pleanala.
The property for that development accounts for the bulk of DCD's writedowns, with the company taking a €107.5m hit on a seven-acre site referred to as 'Ballsbridge site #1' and a €51.7m charge on a 3.75-acre site, 'Ballsbridge site #2'.
Notes on the writedowns point out that a revised planning application for Ballsbridge #1 was lodged with Dublin City Council on October 1, 2009, while Ballsbridge #2's new plans were submitted on August 28, 2009.
In their report dated December 9, 2009, the directors go on to say that the revised valuations reflect the densities used in the new planning applications, suggesting that there will be no further revaluations to reflect the January 2009 refusal.
The other writedowns taken in 2008 include more than €30m for miscellaneous "work-in-progress", as well as almost €5m investment property on Sir John Rogerson's Quay and €7.9m for "goodwill".
Despite the hefty write-downs, and the "material uncertainties" regarding the future of the property market, DCD's directors say they have a "reasonable expectation that the group will have adequate resources to continue in operational existence for the foreseeable future".
That "expectation" comes as directors continue "a communication process with the bankers with a view to ensuring that sufficient working capital will continue to be available to the group".
Notes to the accounts show that the bank borrowings are already secured by 21 separate guarantees, charges, assignments and debentures, including 15 which were introduced in the 2008 financial year.
Mr Dunne's personal guarantees were confined to €4m in July 2007 plus the interest payable on one of the company's loans -- a year later he had taken on another €95m in three separate euro personal guarantees, plus a dollar personal guarantee of $2.75m.
DCD's banks also have a variety of debentures, specific charges and assignments over various assets held by DCD and its subsidiaries.