Bovale Ltd seeks support from Anglo

A BRITISH company controlled by developers Tom and Michael Bailey, who made a €22.17 million tax settlement in 2006, has engaged in “ongoing discussions” with nationalised Anglo Irish Bank to secure support for its £100 million (€115.7 million) property business, which is under pressure due to market weakness.

New official filings in Britain for Bovale Ltd – based in Shrewsbury, Shropshire – strongly suggest the bank has agreed to support the company into the foreseeable future.

The two Bailey brothers are directors of Bovale Ltd, which is engaged in residential, commercial and site remediation projects.

The firm experienced a sharp turnaround in the 18 months to September 2008. With £76.12 million falling due within a year, creditors include £75.33 million for which security has been given.

Signed off last month, abridged accounts for the firm say it finances operations with bank loans from Anglo. “The current economic conditions create uncertainty over the level of demand for the company’s stock of properties for resale and the availability of adequate financing,” the accounts state.

“Over the course of recent months, the company’s directors have been in ongoing discussions with Anglo Irish Bank in order to ensure their continued support for the company’s operations.

“In the light of these discussions, the directors have a reasonable expectation that the company has adequate resources to continue in operational existence for the foreseeable future. Accordingly they continue to adopt the going concern basis in preparing the financial statements.”

Bovale Ltd reported a £4.92 million deficit in its profit-and-loss account at the end of the accounting period, compared with a £2.31 million surplus at the end of March 2007. The firm had a shareholders’ deficit of £9.97 million at the end of last September, in contrast to £2.31 million in shareholders’ funds in the previous period.

A £5 million devaluation of its investment property after a £1.03 million disposal and £4.82 million in acquisitions saw the value of its investment drop to £7.86 million from £9.12 million.

“Currently, Bovale is progressing over 25 development projects nationwide . . . and have a combined development value of approximately £100 million,” the firm’s website says.

The Bailey brothers’ Irish company, Bovale Developments, is one of the largest landowners in the State but it is an unlimited company so information on its financial position is not available. An auditor’s report says it incurred a loss in the year to June 2007.

The planning tribunal found in 2002 that Michael Bailey had made a corrupt payment to former Fianna Fáil minister Ray Burke and found that he obstructed and hindered the tribunal on eight grounds. Tom Bailey was found to have obstructed the tribunal on four grounds.

In another report, published in 2004, the tribunal found that Michael Bailey made three corrupt payments to the former planning official George Redmond, and hindered and obstructed the tribunal on five grounds.