House builder enters talks with lenders

MANAGEMENT at Dublin-based house builder McInerney Holdings has entered discussions with its lenders with a view to revising its banking terms, in light of a further impairment charge.

As part of its first half results, McInerney yesterday said that it recorded an impairment charge of €156 million (on top of the €110m last year) for the period, which would have caused it to breach its tangible net worth covenants with its main bankers, if they were to be tested now.

They were tested and found to be compliant, earlier this year.

McInerney said yesterday that it is now in “constructive discussions” with Irish and British-based lenders with a view to revising its loan facility structures, due to the business now trading at lower levels than anticipated earlier this year.

These revised banking arrangements are expected to be completed prior to the announcement of the group’s full-year results for 2009.

“The group’s lenders continue to be supportive and have agreed to defer the testing of this tangible net worth covenant as part of the ongoing banking negotiations,” the company added yesterday.