Convention centre firm relying on banks to rollover debt

THE company constructing the €380 million Dublin Convention Centre is part of a group relying on banks to rollover repayments on loans.

Two years ago, the Department of Arts, Sport and Tourism selected Spencer Dock Convention Centre Dublin to build a national convention centre in Dublin that could accommodate over 2,000 delegates as part of a public-private partnership. The construction of a national conference centre has been a Government objective since 1989 and work on the centre, designed by architect Kevin Roche is expected to be completed next year.

The Dublin Convention Centre is part of a wider development of 53 acres of mixed-use development of offices and apartment blocks at Spencer Dock. However, accounts filed with the Companies Registration Office confirm Spencer Dock Development and 17 subsidiaries, including Spencer Dock Convention Centre Dublin, had debts of €391m and property-based assets of €552m at the end of December last.

A note attached to the financial statements confirms that one of the key assumptions in the group continuing as a going concern is that repayments on the group’s bank loans will be ‘rolled-over’ this year and next year.

However, the accounts state that the “turmoil in the financial markets is creating difficulties in extending our bank facilities beyond 2010 and 2011”.

The group’s bank loans are due to be taken over by National Assets Management Agency (NAMA).

Directors of Spencer Dock Development include founding directors of property giant Treasury Holdings Richard Barrett and John Ronan.

The accounts confirm the group is also relying upon Treasury Holdings to provide €16m this year and €4m in 2010 to meet the group’s cash requirements.

The accounts state that any failure by Treasury Holdings to deliver on its assumptions “may cast significant doubt on the ability of the group to continue as a going concern.

The accounts show that last year, the group increased its turnover by 76% to €202m. However, its pre-tax losses increased almost four-fold to €55m with the group’s accumulated losses of €84m at the end of last year.

The accounts show last year the company paid €26.1m in interest on bank loans.

The group’s balance sheet shows that last year its net assets reduced from €162.3m to €90.4m.

A spokeswoman for Treasury Holdings said: “We remain committed to the future of Spencer Dock.” She pointed out that to date, the Convention Centre Dublin has contracted events worth over €66m. She said: “Treasury Holdings’ founder directors are major shareholders in the Spencer Dock project and are firmly committed to the project’s successful completion.”

As part of the deal with Government, Spencer Dock Convention Centre Dublin Ltd is required to construct the centre and operate it for 25 years before it reverts to state ownership. The contract with the Government requires the state to pay an annual charge which over 25 years will be just under €380m.

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