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DAA quits joint venture in disastrous property scheme

Semi-state Dublin Airport Authority (DAA) has exited a disastrous speculative property development scheme it undertook with fallen tycoon Liam Carroll.

In a move echoing the Dublin Docklands Development Authority's catastrophic deal to buy the €412m Glass Bottle site with Derek Quinlan and Bernard McNamara, the state-owned airport operator also tried its hand at property development at the peak of the boom.

Close to €34m was borrowed from National Irish Bank for the development of the Horizon Business Park near the airport. However, when Mr Carroll's property empire blew up in 2009, the scheme hit difficulties. Bank covenants were breached by the joint-venture company Turckton Developments, which wrote down the value of its investment by €17m.

Loan installments due last July were repaid and frantic negotiations saw an extension agreed for the borrowings. This was excruciatingly embarrassing for the semi-state company to have loans that were troubled.

Last January, the Sunday Independent revealed that DAA, Mr Carroll's companies and its bankers, were in discussions over the restructuring of the deal.

New filings last week show that DAA is transferring its stake in the development to Mr Carroll's Zelderbridge firm as it exits the joint venture.

Last week, the DAA declined to comment on the developments and reissued its comment from last January: "The company is a joint venture between DAA and Dunloe (a Mr Carroll company). Its borrowings are non-recourse to DAA. DAA understands that Turckton is currently in talks in relation to refinancing its borrowings, and these talks are expected to be concluded shortly," said the DAA. "Turckton has been a profitable investment for DAA, and DAA expects this to continue to be the case."

DAA was also involved with another property scheme with Mr McNamara to develop a business park at Cork Airport.

The joint venture company Brooklyn has taken a massive €5.3m hit to the value of its investment and has spent close to €31m on the project.

Bank of Scotland, which is a shareholder in the business park, was owed over €23m by Brooklyn Properties, according to latest figures.

DAA boss Declan Collier, who has been at the helm of the semi-state since 2005, is leaving this month to join London City Airport.

Sunday Indo Business