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News : Irish Last Updated: Jul 29, 2010 - 7:40:55 AM

Irish Glass Bottle site loans transferred to NAMA
By Finfacts Team
Jul 28, 2010 - 5:54:00 AM

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The site of the former Irish Glass Bottle plant, Ringsend, Dublin (within red contours). It was purchased at the peak of the boom in 2006 for €412 million, by a consortium led by developer Bernard McNamara. In the same year, Ireland's biggest bank AIB, sold part of its Dublin headquarters, the Bank Centre, to developer Seán Dunne.

The loans associated with the purchase of the former manufacturing plant site of the Irish Glass Bottle Company, at Ringsend, South Dublin,  which was sold for €412m in 2006, the craziest year of the Irish property bubble, have been transferred to NAMA.

The loans for the site, part of which was a municipal dump, are now the responsibility of the State's toxic property loans agency, the National Assets Management Agency.  Becbay, the consortium that included developers Bernard McNamara, Derek Quinlan, the State's Dublin Docklands Development Authority (DDDA) and wealthy investors arranged by Davy Stockbrokers, have been asked to submit a business plan before the end of this month. However, the members of the consortium are at war and there is no prospect of any practical plan being put forward.

The Labour Party’s spokeswoman on finance, Joan Burton, submitted questions in the Dáil to Minister for the Environment John Gormley and he has replied that NAMA has requested Becbay to submit a detailed business plan in relation to its outstanding debts by end July.

Gormley said a €288m loan to Becbay was provided jointly by Anglo Irish Bank and AIB. “It is a non-recourse loan largely secured against the land, with the exception of €111.9m that is secured by guarantees of the three shareholders in proportion to their respective shareholdings.”

He said the DDDA’s liability arising from the deal at the end of 2009 involved a principal guarantee on its 26 per cent share of the loans, totalling €29.1m and €5m interest that accrued on its share of the loans for 2009. “This leaves a current liability of some €34.1m, although interest continues to accrue at a rate of €5m per annum until such time as the loan is terminated.”

In Becbay's 2008 accounts it wrote off €452.8m and the Ringsend site, which is the company’s sole asset, was given a valuation of €50m.

“It is unclear as to the terms on which NAMA may continue to finance the working capital requirements of the company in the future,” the directors said in their statement with the accounts.

Bernard McNamara who has admitted he's broke, is suing the DDDA in relation to the deal.

Two Anglo Irish Bank directors including Seán FitzPatrick, sat on the board of the State agency when it agreed to participate in the purchase, from another State entity.

One man made a huge killing from the 2006 transaction, apparently prompted by a minister who announced plans in 2005 to close a property lease loophole:

Finfacts article Nov 2009: Irish Glass Bottle Site: How the State purchased property it already owned!

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