DDDA needed multi-million NIB overdraft
The state-owned Dublin Docklands Development Authority (DDDA), which made a disastrous investment in the Irish Glass Bottle site, was forced to get a multi-million euro overdraft from National Irish Bank (NIB), using its property assets as security, government records show.
And with NIB holding the security, the DDDA is effectively halted from selling its assets unless the bank agrees to the move.
As part of plans to sell state assets, economist Colm McCarthy was given an account of assets and companies supervised by the Department of the Environment, including the DDDA.
This analysis revealed that the DDDA was not in a position to sell assets due to its financial position. The last balance sheet for the company, covering 2009, shows shareholders' funds to be in deficit to the tune of €71m.
The company has a 26pc stake in Becbay, the company that owns the Irish Glass Bottle site.
According to a document from the Department of the Environment to Mr McCarthy: "The authority continues to operate with a budget deficit and the depressed property market is limiting any scope to extract value from its assets to offset its ongoing losses.
"The authority has secured an overdraft facility with NIB with its property assets as collateral and so it would not be possible for the authority (or the State) to sell off these assets without first negotiating with NIB."
The DDDA is believed to have about €33m of assets available for sale in the normal course of events, but the current climate and the banking situation means this is now impossible.
A spokeswoman for the company declined to comment last night on the NIB overdraft.
It is understood the NIB loans are in place until the end of this year. The last set of accounts from the DDDA indicates the firm is able to categorise itself as a "going concern'' due to bank facilities it has on hand. The DDDA had cash of €10.5m at the last balance sheet date; while NAMA, meanwhile, now has ownership of the Becbay loans, the last report from DDDA stated.