€1m bonus for farmers in property consortium
Tuesday August 26 2008
A GROUP of Irish farmers is celebrating a €1m windfall from the refinancing of a property deal in Germany.
The new arrangement drastically reduces the total loan owed by the investors.
Most of the 20 participants in the Alpine Private II consortium, put together by agricultural consultants Farrelly and Mitchell, are farmers.
They purchased a retail centre near Nuremburg, Germany, in the spring of 2007, with a loan of more than €5m -- nearly 65pc of the total price.
However, the continental bank which financed the purchase has now renegotiated its involvement.
The debt was taken over by another lender, with Farrelly and Mitchell agreeing a reduction of €1m in the principal owed to the original financier.
The reduced repayment commitment means the investors will now enjoy a share in the €1m bonus when the German property is sold.
Investors in Alpine Private II put up a minimum of €100,000 and around €3m in total. The reduction in debt means that farmers in the group will benefit to the tune of €33,000 for every €100,000 invested.
- Declan O'Brien
