Balmoral’s property values rise as loans dispute continues

Balmoral International Land, the property company spun out of tropical fruits group Fyffes in 2006, saw the value of its assets rise last year as an expected Covid-19 hit on real estate values failed to materialise and the company reversed a Brexit-related valuation adjustment taken in 2019.

Group net assets rose by €13.7 million last year to €106.3 million, according to the company’s 2021 annual report. That included the elimination of a €6.1 million portfolio valuation adjustment previously taken by management as it adopted a more conservative view than third-party valuers of uncertainties posed by Brexit.

The fair value of its core industrial and warehousing properties in the Republic and UK rose by €11.5 million to almost €146 million, excluding investments and currency movements, as a result of a surge in demand for logistics and warehousing in both markets.

Balmoral – which is 58.7 per cent owned by investment vehicles controlled by members of the McCann family that were synonymous with Fyffes before the latter group's sale in 2017 to Japanese conglomerate Sumitomo – had warned in its 2019 annual report that it expected its property values to decrease as a result of the pandemic.

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Debt management

Still, the company remains in the midst of a legal dispute with Everyday Finance, the debt management and recovery company, over more than €60 million of loans. These are what remains of an original €300 million AIB facility in 2007 and were acquired by a consortium led by distressed debt fund Cerberus in January 2020. Everyday Finance, a unit of debt servicing firm Link Financial Group and part of the consortium, manages the loans on a day-to-day basis.

Everyday Finance claimed in court proceedings initiated late last year that Balmoral did not meet its obligation to repay the loans on demand by the end of 2019. However, Balmoral has said that the alleged repayment obligation does not exist within the facility agreement.

"These proceedings are being fully defended by Balmoral International Land Ltd and Balmoral is confident that the outcome will be confirmation that no such repayment obligation and consequent event of default exist," it said in the annual report, signed off by chairman Carl McCann and finance director Catherine Ghose on August 17th.

The group, whose shares are traded on a grey market operated by Davy, generated gross rental and related income of €9.4 million last year, with 52 per cent coming from the Republic, 39 per cent from the UK and 9 per cent from continental Europe.

Fyffes and a former sister company, Total Produce, which merged last month with Dole Food Company to form Dole plc, account for more than a third of the group's rent roll.