Property market crash claims its first big victim
The property bust has claimed its first big victim, with one of the country's largest developers, Taggart Holdings, yesterday seeing its Irish business units placed under administration.
Ulster Bank and Bank of Ireland petitioned to have an administrator appointed to the Derry-based firm's Irish units, which include a holding company, as well as a Dublin-based subsidiary that has been effectively inactive for over a year.
Last year, Taggart Holdings and its subsidiaries built 500 homes in Ireland and the UK, while it also paid millions of euro for land in north Dublin, close to Charles Haughey's former home in Kinsealy.
Some sites have been placed in receivership. The group's total land bank is thought to be worth more than €600m, on paper.
Taggart Holdings was founded by brothers Michael and John Taggart in 1989, and has been under duress for a number of months.
Earlier this year, it engaged KMPG to negotiate its financial obligations with its two main lenders.
The Taggart brothers were also locked in negotiations for a number of months with Irish builder John McCann, who had been considering boosting his stake in the troubled firm.
Michael Taggart had remained hopeful that a deal would be inked with Mr McCann.
However, the Irish Independent revealed last month that those negotiations had terminated and that Taggart Holdings was scouting for alternative partners.
Ulster Bank is thought to have been concerned that the affected Taggart firms would be unable to trade out of their current difficulties.
In a statement yesterday, Michael Taggart described the move as "deeply regrettable" and added that it was a sign of the "seriousness of the crisis" facing the industry in Ireland.
The company now has just 14 core staff, from a high of 150.
PriceWaterhouseCoopers has now been appointed to trawl through the Taggart books. It will now determine the precise debt position of the relevant firms, as well as the value of assets now held by them.
While it has been speculated that Ulster Bank could be shouldering relatively small amounts of the outstanding debt, other industry sources have suggested that both Ulster bank and Bank of Ireland are bearing an equal burden.
Taggart Group's outstanding bank debt stood at £45m at the end of 2006.
Total debt at the time was £95.1m (then €141m), up from almost £19m at the end of 2005. Bank loans and overdrafts had quadrupled between 2005 and 2006. It's been speculated that group debt could now be as high as £150m (€194m).
In 2004, Taggart Holdings pulled out of a bid to buy listed house builder McInerney Holdings.