MacDonagh fills units to avoid €20m charge
THE property company behind Kilkenny's MacDonagh Junction shopping centre is close to filling all of its units and looks unlikely to have to pay a €20m rebate due if lots had remained empty at the end of the month.
The centre's rising occupancy was confirmed yesterday as MacDonagh Junction Developments (MDJD) announced it had finally agreed a restructuring deal with its creditors.
The development vehicle, which is backed by Douglas Newman Good founder Paul Newman and solicitor Paul Hanby, had been trying to strike a 62c in the euro deal with creditors for close to a year.
The deal was bitterly contested by two creditors who both brought winding up petitions to the High Court last summer. MDJD's spokesman yesterday confirmed those two creditors had been "dealt with separately with the full knowledge of the other creditors".
The financial situation of MDJD looked to be further jeopardised in recent months when fresh company filings showed the company expected to have to pay €20m to buy back empty units this summer.
The payments were likely to be triggered, the company said, because MDJD had agreed to buy back any units that were not let by the end of April 2010, paying 2007 prices for the transaction. The note was signed off last November.
MDJD's spokesman yesterday said the centre's occupancy had improved considerably since then.
"The clause relates to the main shopping centre only and I understand that 95pc of that is full now with two remaining outlets still under negotiation," he said.
"Given the situation, that liability clause should not crystallise."
MDJD's most recent accounts show creditors of almost €22m on the books in February 2009, including €11.5m owed to banks, €5.1m owed to trade creditors and €3.9m owed to "group companies".
The company took a €15.4m impairment charge in its 2009 financial year, reflecting the challenging commercial environment.