Park paid €470,000 dividend before loans sent to NAMA
Published 03/12/2010 | 05:00
Dublin-based construction company Park Developments paid a more than €470,000 dividend to a company controlled by its owners, husband and wife Michael and Angela Cotter, even as loans linked to the building firm were being prepared for transfer to NAMA.
Accounts for the business just filed with the Companies Registration Office show that a €477,000 dividend was paid to the company's shareholders in 2009. Park's shares are owned by an unlimited entity, Viscount Securities, which is in turn owned by other unlimited vehicles controlled by the Cotters.
The dividend was also paid as Park Developments (Dublin) racked up a €4.2m loss in 2009 as turnover at the company slumped 58pc to €68.6m.
Park Developments' ultimate parent firm is Quorn Securities, which is an unlimited company. Directors at Park Developments, which was one of the first building firms to sell new homes in Dublin for more than £1m (€1.27m), back in 1999, were also paid a total of €1.64m in 2009, down from almost €3.2m in 2008.
The group's banker is Allied Irish Banks. Park Developments' accounts note that it has been funded by a combination of loan balances from Quorn Securities and a bank overdraft facility. Quorn has "a number of facilities with an external bank", which expired in August last year and which have not yet been called in for repayment.
It's also noted that the group has continued to discharge its financial liabilities, including loan interest payments, and will be able to do so for between four and five years from the date of the approval of the financial statements, which were signed off at the end of August this year.
However, the accounts also caution that there exists uncertainty regarding the agreement of funding facilities on terms acceptable to the directors of the firm and to NAMA.
There are also uncertainties in a business plan prepared by Quorn Securities, primarily in respect of the "quantum and timing of revenues from sales of units from completed or near- complete construction projects". However, the directors noted that they were "confident" that external funding agreements would be agreed on terms acceptable to the Quorn group and to Park Developments.
During 2009, Park Developments received an €8m capital contribution from a company called Ballyboden Farms, which is controlled by the Cotters.
Park Developments impaired development land it owns by €11m last year, following an €8m impairment in 2008. It also paid a little more than €1m in redundancy costs in 2009 compared with €4.1m in 2008.