Empire of Dublin Developers Autocracy (DDDA).When Anglo Irish Sails Away Does The Galway Tent Buy Sandymount Strand With Your Tax Money?
October 10, 2008.
If or when Anglo Irish goes bankrupt or is “saved” by taxpayers does BIFFO's Five Hundred Billion Euro deal mean the Irish Taxpayer is now buying 25 acres of the toxic IGB municipal dump site for the histrionic book value of €450 million, instead of for its current market value of say €45 Million?
BIFFO's Five Hundred Billion Taxpayer Euro =
- €500,000,000,000
- $700,000,000,000
Largest Bank Robbery
For the example of the IGB site, would people in The Beach Tavern consider a possible Galway Tent directed bank-and-developer-rescue to be a legal theft of more than €400 million of taxpayer's cash? That's equivalent to ten Northern Bank jobs, the largest illegal bank robbery in Ireland.
If they could cross The Bog Of Allen is it possible a Chinese or Mid-East Bank could call BIFFO's bluff? Just for the IGB site the money market suppliers could legally demand €450 Million. Such a bank could then liquidate the Glass Bottle site for say €45 million.
Honest Bankers
Anglo Irish Bank made a loan of €288 million enabling a consortium to buy the Glass Bottle Factory for €412 million. This factory is sited on Sandymount Strand and has been liberated from public ownership.
Guess who benefited in the form of substantial bonuses, options, revolving doors and other compensation. Could it be the gentlemen(a) slagging BIFFO and McCreavy as they departed AIB HQ on a wet night in Ballsbridge around 9PM on the Tuesday after BIFFO's deal? Their secretaries were a few hundred yards away (b). The Horse Show House was deserted. Crowe's was packed. Across the road from AIB HQ is The Four Seasons where the Galway Tent hangs out in The Ice Bar. The Galway Tent is never seen in Ringsend's Beach Tavern.
(a) all white middle aged gentlemen, as in the Mad Men's 1960s America
(b) all female, also exactly as in the Mad Men's 1960s America
Becbay valued the 24.5-acre Ringsend-Sandymount property at €449 million at the end of 2007. Becbay said construction on the site would start in April 2009. Becbay plans to develop 2,166 apartments and 252,000 sq m of commercial space. The project will generate revenues of €1.76 Billion and a pretax profit of €296 million,
Three Hundred workers were fired when the Glass Factory was shut. Glass is now exported for recycling.
Friday, August 22, 2008
Anglo Irish defers €2.5m fee for Becbay
SIMON CARSWELL, Finance Correspondent
THE COMPANY behind the redevelopment of the Irish Glass Bottle Site at Ringsend in Dublin had its bank debt reduced by €2.57 million in 2007 due to the deferral of arrangement fees on loans of €293 million, new accounts show.
Anglo Irish Bank, which is financing the project, made a loan of €288 million to Becbay, the firm owned by the consortium which agreed to buy the Ringsend site for €412 million in November 2006.
The remainder of the purchase price came from the consortium, which comprises developer Bernard McNamara, financier Derek Quinlan, clients of Davy stockbrokers and the Dublin Docklands Development Authority (DDDA).
Anglo has deferred arrangement fees for property developer clients in the past, but the practice has become less common due to more restrictive lending amid the slowdown in the property market.
Becbay valued the 24.5-acre Ringsend property at €449 million at the end of 2007, an increase of almost 9 per cent on the site's purchase price, according to accounts just filed for the company.
Mr McNamara's company Donatex made a loan of €62.5 million to Becbay last year. He also made a personal loan of €101,000. Mr Quinlan's firm Mempal loaned €51.3 million, while the DDDA made a loan of €36.1 million.
Becbay made a pretax profit of €36,500 in 2007. The firm said construction on the site would start in April 2009. A company spokesman said the decontamination of the site, initially due to be completed by January, was "ahead of schedule" and would be completed in November. He declined to comment on the deferral of loan arrangement fees, saying it was "a private matter".
Assessing risks to the company, Becbay's directors said the firm had "sufficient" banking facilities in place and "continued equity support of all shareholders". Becbay said it had hedged on the interest bill on its bank loans. Some €202 million of the firm's bank debt of €293 million was on a fixed interest rate, while €91 million was a floating rate.
The company had incurred a liability of €502,000 on its interest rate swaps by the end of last year.
Becbay plans to develop 2,166 apartments and 252,000sq m of commercial space. The project will generate revenues of €1.76 billion and a pretax profit of €296 million, according to a 2006 information memorandum for the development. Becbay received €138.4 million in loan stock as equity for the site's purchase and development.
Davy's investors put up €52.25 million, with Mr McNamara personally guaranteeing their capital.
Under the investment agreement, the Davy investors will be paid an annual return of 17 per cent over seven years. Mr McNamara's firm, BMcNCO, can repay them after two years with at least a 40 per cent return and in minimum tranches of €1 million.
© 2008 The Irish Times
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Anglo Irish Bank, under the most pressure when depositors withdrew about €10 billion in funds last week, provided the catalyst for the emergency action.
Sebastian Meyer, a senior analyst at London-based CMA DataVision, said that while Ireland’s risk of defaulting on a loan was doubling, Irish banks halved their risk perception.
Based on CMA’s data, the cost of borrowing €11.5 billion to meet the current budget shortfall will have risen by €31m due to the bank guarantee scheme.
http://www.timesonline.co.uk/tol/news/world/ireland/article4882856.ece
DDDA could have lost €15m on CHQ
Neil Callanan
http://www.tribune.ie/archive/article/2008/jun/08/ddda-could-have-lost-15m-on-chq/
THE Dublin Docklands Development Authority (DDDA) could have lost up to €15m if a deal to sell its CHQ shopping centre in the north docks had gone ahead.
The authority recently revealed that the centre had cost €50m to convert from a Victorian warehouse into a shopping centre.
However, The Sunday Tribune has learned that the authority's agreement with leisure entrepreneur Hugh O'Regan gave him an option to purchase about 75% of the centre after five years for just €25m.
Other tenants were to be given similar options, suggesting the entire building could have been sold for less than €35m.
Documents previously released under the Freedom of Information Act show that O'Regan would have had the option to purchase the property for a fixed price after the completion of the first rent review which would take place five years into the lease.
O'Regan did not return a call seeking comment.
The DDDA said "any agreements with tenants at CHQ are commercially sensitive and subject to confidentially agreements".
The contract did include a clause stating that the centre's value would be reviewed to open market value prior to sale. CHQ was originally expected to cost €40m to convert but eventually cost €50m.
O'Regan planned to build a second higher cantilevered building in the airspace above CHQ if the deal had gone ahead. In the end, however both the Dublin Docklands Development Authority (DDDA) and O'Regan mutually agreed to walk away from the deal.
In 2004, O'Regan had raised ''genuine and very serious reservations about the dampness problem, which has arisen both at basement and ground floor level in CHQ''.
He had been advised it would take a minimum of two years to dry out the building or to ensure there is no recurrence of the dampness and seepage problems.
Built in 1820 by engineer John Rennie, CHQ was originally a bonded warehouse. It opened in 2006 after lying empty for two years prior to that as it struggled to secure tenants.
The DDDA recently announced that it was seeking public feedback on plans to develop the former South Wharf site in Ringsend.
The authority bought the site with Bernard McNamara and Derek Quinlan for €412m and sources said that they are planning to turn it into an extension of Strand Road in Sandymount.
June 8, 2008
http://www.independent.ie/multimedia/archive/00212/cartoon_212424t.jpg
Will the Government step in and rescue a bank before a developer goes under? If it does, then the developer may not go under because the bank might rescue the developer.
Will the Government wait until a developer goes bust and then move capital into the banks?
This would then allow it to claim to an increasingly enraged middle-class that it is not bailing out the banking system at the behest of the builders, but what builder will be sacrificed?
...
- Daire O'Brien
Thursday October 23 2008
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Read full article:
http://www.independent.ie/business/irish/lenihan-created-a-smokescreen-that-hides-nothing-with-budget-brouhaha-1506148.html
The letters are expected to lead to discussions with banks about McNamara's borrowings.
* McNamara was the biggest shareholder in the consortium that bought the Irish Glass Bottle site in Ringsend for €410 million in 2006.
* McNamara has banking relationships with Anglo Irish Bank.
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McNamara updates banks on his financial position
26 October 2008
By Ian Kehoe
http://www.sbpost.ie/post/pages/p/story.aspx-qqqt=NEWS-qqqs=news-qqqid=37061-qqqx=1.asp
Property developer Bernard McNamara has written to a number of his lender banks in light of the ongoing downturn in the property market.
The letters, known in the banking industry as ‘‘framework documents’’, provide an update on the developer’s financial position.
The letters, sent late last week by McNamara’s finance director, are being seen as a statement of McNamara’s commitment to work through the difficult trading environment, and are expected to lead to discussions with banks about his borrowings.
McNamara has banking relationships with several lenders, including AIB, Bank of Ireland, Anglo Irish Bank and Bank of Scotland (Ireland). While the exact extent of his total borrowings is not known, it stretches into the hundreds of millions of euro.
McNamara has been involved in several of the biggest development site purchases of the property boom, and has also won several major construction contracts. The letters may trigger discussions between the Clare businessman and his banks about future funding.
Banking sources said framework documents were becoming increasingly commonplace in the current climate.
McNamara acquired the Burlington Hotel in Dublin 2006 for €288 million as part of a joint venture with Bank of Scotland (Ireland). He also bought the nearby Allianz building for more than €100 million. In May, he received planning permission for a €1 billion development on the site.
He was the biggest shareholder in the consortium that bought the Irish Glass Bottle site in Ringsend for €410 million in 2006.
McNamara is also part of a consortium that won a tender to build a co-located private hospital at St James’s in Dublin and the Thornton Hall prison in north Dublin. He is part of another consortium that owns the Shelbourne Hotel.
However, he has also been selling assets, including his shareholding in the Superquinn food chain. In April, he put two shops on Grafton Street on the market for a total of €43million.They were withdrawn last month after very low bids were made.
In May, he announced he would not go ahead with contracts to build social and affordable homes for Dublin City Council as they were no longer financially viable.
© Thomas Crosbie Media, 2008
http://www.sbpost.ie/post/pages/p/story.aspx-qqqt=NEWS-qqqs=news-qqqid=37061-qqqx=1.asp
Galway Tent developers hope they will not lose their homes when they go bankrupt.
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Property developers have begun moving their houses into their wives' names as fears grow that banks will move against their assets.
Sources also said several developers were looking to move assets that did not have mortgage charges into trusts, with their wives and immediate families as beneficiaries, as they seek to limit their exposure to personal guarantees they made when borrowing money.
In 1995, Mr Justice Richard Johnson ruled that the purpose of the 1976 Family Home Protection Act was to protect the family home and "to prevent families being evicted when a spouse, through either stupidity or greed or whatever else – or bad business or bad luck – lost the family home".
Some developers hope that means they will not lose their homes when they go bankrupt.
Given the value of many of the houses and their location, the developers could later sell the house to raise the equity to go back into business.
Legal, accountancy and investment sources have confirmed that the moves have been under way for months.
"I have no doubt it's being done," said one senior tax adviser.
However, one legal source warned that it would be hard for the trust moves to stand up in court.
"That would be a fairly well-used trick. It is easily undone and the court will just void those transactions," he said.
Meanwhile, some banks are believed to be taking their property loans off their balance sheets and moving them to their trading books so that they will not have to write down their values. Instead, the loans could be amortised over several years.
Neil Callanan,
November 2, 2008
http://www.tribune.ie/business/article/2008/nov/02/property-developers-putting-assets-in-their-wives-/
When the ... debate was over, Minister for the Environment and Green leader John Gormley arrived in an empty chamber, having found a fig leaf. He was there to talk about boundary changes in the Sandymount area of his constituency.
John and his colleagues are staying in Government, no matter what. They can already see the fruits of their continuing collaboration with Fianna Fáil - bicycles, light bulbs and yesterday, another breakthrough.
Free monkey nuts in the Dáil canteen.
© 2008 The Irish Times
http://www.irishtimes.com/newspaper/ireland/2008/1030/1225320616209.html
Anglo has hired Morgan Stanley to hit rich Gulf states for cash.
Barclays has just raised €9bn from Qatar and Abu Dhabi.
Despite what they think about themselves, Anglo isn't even on the radar there.
http://www.independent.ie/business/irish/banks-now-in-a-scary-state-1517368.html
Anglo Irish Bank is now valued at €500 million, just a shade higher than the €450 million mid-2007 valuation of the IGB site in Ringsend for which it loaned €288 million. The IGB site may now be worth €100 million.
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Thursday, December 4, 2008
Anglo shares slump to lowest level in 11 years
SIMON CARSWELL
ANGLO IRISH Bank's shares plummeted 29 per cent to their lowest level in 11 years as the bank reported a 37 per cent drop in pretax profits after setting aside more money to cover future losses on loans to the property market
The State's third-largest public bank reported pretax profits of €784 million in the year to September 30th, after setting aside €500 million to cover future losses on loans, mostly to developers. The share price fell to 67 cent, its lowest since 1997, valuing the bank at €509 million, as the profits came in well below expectations, while the bad debts were almost seven times higher than the bank had forecast in August.
Anglo's chief executive David Drumm said the €500 million charge against unspecific loan losses was "quite a whopping provision to take, but it's recognising the world we are in".
The bank also took a bad debt charge of €224 million against losses on specific loans, 81 per cent of which are to developers in Ireland and the UK.
Anglo has written off €128 million on the value of treasury assets, including investments indirectly linked to US subprime mortgages. The bank has also taken a bad debt charge of €155 million on other investments, including a €27 million exposure to the state-rescued Icelandic banks and a loss of €4 million arising from the collapse of the US banks, Lehman Brothers and Washington Mutual.
Anglo said it expected to take a bad debt charge of between 0.8 and 1.2 per cent of loans - or about €720 million - each year for the next three years, again mostly from losses on loans to developers.
Finance director Willie McAteer said that in a worst-case scenario the bank could lose up to €2.76 billion in total over the next three years, but could still be able to make profits similar to the bank's 2008 level in each year.
Mr Drumm said the bank could double the loan losses estimated in this scenario and still remain at break-even level each year.
The scenario would involve Anglo writing off up to 11 per cent of its €8.9 billion residential development loans, which accounts for 12 per cent of overall loans.
The bank based its figures on house prices falling 20 to 40 per cent from their peak and land values dropping 30 to 50 per cent, and said they were at the halfway stage of their decline.
Mr McAteer said the €500 million charge was "a demonstration of prudence" but also showed the bank could take "very significant charges" and still remain in profit.
Anglo said its core tier one capital ratio - a measure of a bank's cushion to absorb future losses - totalled 5.9 per cent, or 6.7 per cent if unspecified loan losses are excluded, at September 30th.
Anglo said it expected to increase this ratio to the "new emerging benchmark" of between 7.5 and 8.5 per cent by retaining profits over the next three years.
Mr Drumm said the bank could reach 7.8 per cent by retaining a year's profits similar to 2008 levels. The bank said it would "consider opportunities to accelerate the achievement of this benchmark, ever cognisant of the interests of existing shareholders".
He said the bank had not yet decided on whether it would accept additional capital from external investors or the State.
This article appears in the print edition of the Irish Times
http://www.irishtimes.com/newspaper/finance/2008/1204/1228337398501.html
Anglo-Irish Bank is not required to give a breakdown of its loans to individual directors.
Outstanding loans from Anglo to its directors totalled € 41 million in September 2007, the most recent date for which directors’ loan disclosures are available. This was up from €31 million in September 2006.
An Anglo spokeswoman declined to comment on whether Anglo had granted any loans to Drumm or any other director to buy shares in the bank. She also declined to comment on what security - such as personal guarantees or charges over individual directors’ assets - the bank may have been given if loans were granted to buy shares.
http://www.sbpost.ie/post/pages/p/story.aspx-qqqt=THE+MARKET-qqqs=themarket-qqqid=38200-qqqx=1.asp
http://www.politics.ie/economy/40391-anglo-irish-fully-nationalised-15.html#post1369517
Anglo Irish, their property developer clients and political sponsors in Fianna Fail almost certainly do not want us to know too much about how exactly this bank failed.
With the same government people who oversaw the collapse now still firmly in charge, how convenient that they too should be in charge of its nationalisation.
This [commercial privacy] clause is an outrageous provision - potentially an open cheque book but a let out for any uncomfortable questions?
Where are the opposition parties? Where are they ever.
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