Developer sees net liabilities top €500m

Net liabilities at the property development group of companies owned by Galway developer John Lally have increased by €66m to over €500m.

Developer sees net liabilities top €500m

Figures lodged with the Companies Office show that net liabilities at subsidiaries of Lalco Holdings Ltd have increased from €440m to €506m.

The holding firm has just lodged three sets of accounts for 2011-13 which reveal the increase in the firms’ liabilities.

A note attached to the accounts states that the directors have an agreement in place with Nama that provides for a repayment plan of the companies’ debts concluding in 2020. The note states: “There are certain guarantees, securities, and default conditions in place under the agreement.”

The accounts show that Lalco Holdings’ accumulated losses increased marginally in 2013, from €54.52m to €55m.

The note states that the directors believe the company will be unable to recover the deficit at the balance sheet date as the company has limited income and limited prospect for future income. “The directors consider that this position will not change for the foreseeable future,” it states.

The undoing of Lalco’s property development arm was down to a number of high-profile and extremely expensive land acquisitions in the Sandyford area of Dublin.

Devano Developments Ltd, an individual firm, had a deficit of €203.2m at the end of December 2013, while Brackville Holdings Ltd, another individual firm, had a deficit of €174.4m. Another firm, Sova Properties, had a deficit of €80.1m.

One of the firms, Fifes of Wiltshire Ltd, had a deficit of €2.69m at the end of 2013. It secured planning permission for a €250m tourism development at Mr Lally’s Humewood Castle in Kiltegan, Co Wicklow, in 2009, which was to feature a five-star hotel, leisure centre, tourist lodges, and a golf course.

Mr Lally purchased the 19th century Gothic pile for €25m at the height of the boom.

However, his ambitious plans never materialised and Humewood Castle was purchased for €8m by US billionaire John Malone in 2012 — Mr Malone has also purchased the Westin Hotel as part of an Irish hotel spending spree.

The mounting losses at Mr Lally’s construction firms are in sharp contrast to the growth of his hotel interests over recent times. For example, the Lalco Hotel Group last year purchased the five-star Glenlo Abbey and golf resort outside Galway and also signed an agreement to operate Mr Malone’s Westin Hotel.

Lalco Hotel Group has an impressive portfolio of hotels and hospitality centres, such as the Hilton Dublin Kilmainham; Hilton Dublin City; Trinity City Hotel; the Limerick Strand Hotel and the Harbour Hotel in Galway.

The hotel group currently employs more than 1,100 people throughout the country.

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