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Treasury subsidiary owes almost €400 million
14 March 2010 By Gavin Daly
A Dublin property company backed by developer Johnny Ronan, who is taking a break from his business activities, owes almost €400 million and is relying on support from its parent, Treasury Holdings.
Spencer Dock Development Company, which is developing apartments and offices in a large chunk of the north quays in Dublin, had total borrowings of €391 million at the end of 2008.
The firm’s revenues rose to €202 million that year, but it made a pretax loss of €55 million.
After revaluing its properties, it recorded a total loss of €72 million for 2008, according to recently filed accounts.
Ronan is a director and shareholder in the Spencer Dock company, alongside his fellow Treasury director Richard Barrett and Harry Crosbie, the owner of the O2 and the Point Village development. The directors said in the accounts that the financial crisis was ‘‘creating difficulty in extending our banking facilities beyond 2010 and 2011’’.
However, they said that the firm, which lists Anglo Irish Bank, AIB and KBC as its bankers, had successfully renewed its debt terms and had not breached any loan covenants.
‘‘The directors expect that the majority of the remaining debt falling due in 2010 and 2011 will also be extended in 2009 in the ordinary course of business," they said. At the end of 2008, the firm valued its investment and development properties at €314 million and had a further €161 million worth of property under construction.
Its trading properties were valued at €77 million. However, the auditors to the firm noted that the company’s property valuations were carried out solely by Treasury employees.
The directors of the Spencer Dock company said that any failure of Treasury to meet certain financial assumptions ‘‘may cast significant doubt on the ability of the group to continue as a going concern’’.
Treasury’s total borrowings are understood to run to billions of euro and its loans will be among the first to be taken over by the National Asset Management Agency.
Ronan announced last week that he was taking a break from his business activities ‘‘for the next few months, arising from the recent high-profile media coverage of aspects of his personal life which he believes has the potential to distract attention from his business interests."
Treasury Holdings will be among the first tranche of bank clients to have their loans transferred to Nama.
Sources suggested that Ronan’s statement announcing his break from the company has been partially prompted by concerns that Ronan’s recent private jet jaunt to Morocco, with former Miss World Rosanna Davison, could affect the attitude or approach taken by the company’s bankers and Nama, in providing new funding to the group.
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