Ex-Anglo bankers back Drogheda shopping centre buyout from Cerberus

Developer Phil Reilly's Rockmill has refinanced the Southgate Shopping Centre in Drogheda, whose loans estimated to be worth €75 million were acquired by US fund Cerberus from the National Asset Management Agency (Nama) last year.

Rockmill, which developed the centre shortly before the property crash a decade ago, completed the buyout from Cerberus using finance from Earlsfort Capital Partners (ECP) and wealthy Dublin businessman Kieran Fox.

Southgate, which is anchored by Dunnes Stores, lies on the southern edge of Drogheda, the Dublin side of the growing commuter town. It also includes 60 apartments and a commercial scheme, where tenants include a Coca-Cola company that employs 280 staff on the site.

The Rockmill investors who developed the scheme include housebuilder Mr Reilly, whose main company is Shannon Homes (Drogheda), and his business partner, Meath businessman John Stanley.

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Transferred

When the financial crisis hit, the original AIB loans secured on Southgate were transferred to Nama. Rockmill's most recently filed accounts, dated December 2016, show total loans of €77 million, the majority held by the State agency.

In early 2017, Cerberus bought a large portfolio of commercial loans from Nama, which included the Rockmill debts.

Documents recently filed in the Companies Registration Office by one of Mr Reilly’s other businesses, Dubhhill Properties, reveal details of the Southgate refinancing, which was completed in recent weeks.

Dubhhill's filings state it will loan an unspecified level of cash to Rockmill for the refinancing. The documents state that a senior lending facility for the deal was arranged by ECP, with mezzanine financing from a newly established company, Oval Cove.

Specialist lending house ECP was founded after the crash by Irish property financiers Fergal Feeney and Paul Brophy, who were formerly senior executives with Anglo Irish Bank in the UK and the US.

Transactions

ECP, which has offices in Dublin, London and Boston, has significant financial backing from US fund Garrison Investment. It has been active in recent months in several Irish transactions, reportedly including deals for the Fairgreen shopping centre in Carlow and the Quays shopping centre in Newry.

The mezzanine lender to Rockmill, Oval Cove, is controlled by food ingredients entrepreneur Mr Fox and another member of his family.

Mr Fox made his fortune two years ago when he sold Redbrook Ingredients to an Israeli company for €40 million. He still runs Redbrook for its new owner.

Mr Fox made no response to requests for comment. Cerberus and ECP were unavailable for comment.

Mr Reilly, who is currently building hundreds of houses north of Dublin with funding from Bank of Ireland, could not be reached for comment.