Donatex dependent on support of bankers - report

DONATEX, THE vehicle used by Bernard McNamara in relation to the former Irish Glass Bottle site in Ringsend, Dublin, is dependent on continuing support from its bankers, according to a statement written by its directors last month.

The directors’ report dated December 2nd, 2009, which accompanies the company’s recently filed accounts for 2007, say negotiations are ongoing with a view to extending committed banking facilities “thereby ensuring that sufficient working capital will be available to the company for the foreseeable future”.

The accounts do not disclose what bank the company is using.

Yesterday, the Commercial Court was told the company had been listed for strike-off for the non-filing of its accounts, but that that situation had been resolved. Mr Justice Peter Kelly said being listed for strike-off was not a sign of a “well-run company”.

Donatex invested €62.9 million in Becbay and in return got 41 per cent of that company’s shares. Becbay’s other shareholders are property developer Derek Quinlan and the Dublin Docklands Development Authority (DDDA).

Becbay bought the 25-acre Ringsend site for more than €400 million with a view to developing it at a profit.

Donatex in turn secured a €62.5 million investment from clients of Davy Stockbrokers in January 2007, with an “equivalent compound rate of 17 per cent”, and a repayment date of 2014.

The Donatex profit and loss account for 2007 shows interest payable during the year of €10.18 million, mostly arising from the Davy investment. The loss for the financial period was €9.7 million.

The directors of Donatex are Mr McNamara and Michael Flannery. In their report accompanying the accounts, they say they believe the company’s capital investment of €62.9 million in Becbay “will be recoverable by 2014.”

However, they say their assessment of the situation involves assumptions that are “highly subjective”.

They say they have estimated the value of the site based on a planning application that has been submitted to the DDDA but not approved and on value calculations, given market conditions, that are highly subjective.

The assessment is also based on an assumption that planning will be approved, and that the project will secure adequate funding.