Cantillon: Bovale seeks loans to build up cash flow

Accounts how accumulated losses of £46.9 million

Accounts just filed in the UK for Bovale Ltd, an English arm of the construction group owned by brothers Tom and Michael Bailey (above) , state the business is dependent on new loans from its lenders if it is to maintain its going-concern basis.

The new financing, according to the abbreviated accounts, is needed to complete property development projects so that positive cash flows can be generated. A similar note was contained in the previous year’s accounts. A request for a comment made to the group’s head office in Batterstown, Co Meath, yesterday, got a negative response.

The accounts, which show accumulated losses of £46.9 million (€54.7 million) at the end of September of last year, do not identify the lenders who are being asked for financial support, though the company's filings show a number of outstanding mortgages with Anglo Irish Bank, loans which are now presumably with Nama.

The company’s auditors, in their report dated October 3rd last accompanying the accounts, said the loan application from the company was “in accordance with its strategic plan”. The Irish-registered Bovale Developments has received a Nama loan, so it would seem a business plan has been approved for the group. However no mortgage with Nama has been registered by the English company as yet.


The accounts contain a reference to a claim against the company which, if successful, would require further funding. No further information is given.

The company’s investment property was accorded a value of £4.97 million at the end of September 2012, and its stock a value of £34.57 million. The shareholders’ deficit at the end of the year was £52 million. A subsidiary, Castle Farm Telford, made a loss of £4.9 million in the year to the end of September last, and had a shareholders’ deficit at that date of £50.3 million.

Readers may recall that in the earlier part of the noughties the two Baileys shared salaries from Bovale Developments of about €10 million each. However, by the middle of the decade they were better known for having made one of the largest ever settlements with Revenue – €22.17 million.