The value of the property assets owned by developer Sean Dunne’s main trading company is now ‘‘subject to uncertainty’’ in light of the economic downturn.
DCD Builders has property-related assets valued at €477 million, but owes its banks €624 million. The firm’s continued ability to trade depends on the support of Dunne and the banks, according to new filings at the Companies Registration Office in Dublin.
Amid the mounting debt, Dunne has said he will not seek repayments of €176.3 million he has advanced to DCD Builders for an additional 12 months.
Despite the property slump, the company has refused to write down the value of its assets, citing the quality of the location of its properties.
Further filings show that Bank of Ireland moved in recent weeks to secure loans it advanced to the company by registering a charge against the company’s borrowings. A number of financial institutions, including AIB, now hold charges against assets in Dunne’s company.
Dunne has also given a personal guarantee of €4 million in relation to the company’s borrowings, according to accounts for DCD Builders.
‘‘Based on a review of financial projections and consideration of the availability of financial support, the directors believe the appropriate funding will be made available to the group and company to enable the group and company to realise the value of the property-related assets,” the accounts stated.
DCD Builders made a pretax loss of €14.8 million last year, compared with a profit of €31 million in 2006. Turnover decreased slightly, from €50 million to €48 million.
The deterioration in profits is largely attributable to interest payments on bank loans totalling €38 million during the year. The cost of sales also rose steeply.
Dunne has been one of Ireland’s most acquisitive developers. In 2006, he agreed to pay €260 million for the 4.84-acre Jurys Doyle site in Ballsbridge, and €119 million for the adjoining Berkeley Court hotel. He is currently awaiting the outcome of a Bord Pleanála hearing into his master plan for the Ballsbridge area.
DCD Builders is ‘‘involved in the completion of certain properties and in the planning process in respect of certain other properties, and are continuing to take the necessary steps to bring the various proposed developments to a successful conclusion’’, the accounts said.
According to the accounts, the firm is owed €387 million that it advanced to another group company, JDPCH, which is unsecured, interest-free and repayable on demand. The company has work in progress valued at €321 million.
Sunday Business Post
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