Entrepreneur sees losses at firm hit €40m

Losses at a development company operated by entrepreneur Niall Mellon increased by €14.2m to €40.5m over two years.

Accounts filed for Knockrabo Developments Ltd to the Companies Office for 2010 and 2011 show the firm’s accumulated losses increased from €26.3m to €40.5m.

A note attached to the accounts confirms the company was in breach of its loan facilities with the IBRC, with the loans due for repayment on Jan 31, 2009. The loan has not been repaid. It was transferred to Nama in 2010 and repayment can be demanded at any time, the note states.

Mr Mellon is best known for his work through the Niall Mellon Township Trust. Last year, he announced its annual charity building blitzes were to be wound up.

Since 2002, the trust has built about 20,000 homes and housed more than 100,000 people, with around 8,000 Irish people travelling for the various building blitzes, raising about €40m in donations for his ambitious housing programme for the poor of South Africa.

The figures show Knockrabo owed IBRC €43.3m and that the bank held a personal guarantee and indemnity from Mr Mellon as security for the loan, along with a fixed and floating charge over the property assets and undertakings of the borrower.

“The company has negative net assets in excess of €38m at the balance sheet date,” the attached note states, adding that “this is after providing for €17.6m in doubtful debts in relation to related company debtors”.

It adds: “It is unclear at the date of this report whether or not these debts will be recoverable, but the directors have provided for these doubtful debts on a prudent basis.”