Ballymore reveals €200m loss
Ballymore International Developments Limited, the company headed up by developer Sean Mulryan and whose smaller shareholders include Dr Michael Smurfit, incurred losses totalling more than €200m in 2009 and 2010, despite cutting staff by nearly two thirds and slashing the pay of some senior executives by 20 per cent.
The company, whose Irish loans are now in Nama, has also closed down larger offices and moved to "smaller, more cost-efficient sites" while directors' fees of €250,000 a year accrued since 2007 have not been paid.
The other directors of the company include former Nationwide board member David Brophy, Brian Davy of Davy Stockbrokers and finance chief Brian Fagan.
The annual report reveals the company has loans of €155m from Irish banks that are now in Nama and which were taken out to finance European property developments, including major investments in Prague and Berlin.
The group incurred a loss of €91m in 2010.
Ballymore's (BIDL) non-Nama loans comprise €287m from a KBC-led syndicate for the Eurovea development in Bratislava, Slovakia.
According to the report on company activities in 2010 by group chief executive David Brophy, BIDL has sought to work closely with and co-operate fully and constructively with Nama management to agree a Memorandum of Understanding, which would prove a framework within which the company and the agency can operate.
The company believes it can survive as a going concern but listed a number of caveats in its review and annual report for 2010.
It notes that the group's future performance will be influenced by the macro-economic financial, credit and property industry conditions, which are outside the group's control.
"The group's bank borrowings are provided by Irish and other European financial institutions. Certain of these financial institutions continue to experience extremely difficult trading conditions and are either owned, partially owned or supported by their national governments. The limited ability of these banks to provide lending at the current time is severely affecting the group's ability to meet immediate funding requirements," the report said.
The group's business plan includes detailed cashflow projections until the end of 2013 but a note in the financial report confirms they are based on a number of assumptions.
These include that bank loans falling due this year will be repaid, refinanced or renewed on similar terms to existing arrangements and that breaches of bank covenants that have occurred will not be actioned by Nama or the banks.
Crucially, the report states that among their assumptions in preparing their financial plan is that Nama will support the working capital requirements of the group and provide the necessary funding to enable BIDL to meet its operational funding needs.
Sean Mulryan founded Ballymore in 1982 and has built the company into one of Europe's leading property development firms.