McInerney devalues land by €156m

Shares in McInerney Holdings have fallen sharply this morning after the firm wrote down the value of its land by another €156…

Shares in McInerney Holdings have fallen sharply this morning after the firm wrote down the value of its land by another €156 million because it does “not now foresee any immediate improvement in market conditions.”

At 12.15pm shares in the firm were down 12 per cent having earlier fallen over 28 per cent.

The Dublin-based firm said it was in “constructive discussions” with lenders in the UK and Ireland about revised loan facilities and expects to extend the UK maturity date to 2011 from March 2010.

Lenders also have agreed to defer a certain covenant test.

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McInerney took an impairment charge of €110 million in its 2008 results and has now written down the value of its Irish and UK land by 52 per cent and 41 per cent respectively since the middle of last year.

McInerney managing director Barry O’Connor said Nama will help to improve banks’ liquidity.

He said in a phone interview that there are signs of “better sentiment” in the UK housing market.

The company said today there were signs of “some market recovery” in the UK.

“The timing and rate of recovery in the housing market will be dependent on a wider improvement in the economic conditions in Ireland and the UK together with a tangible increase in the supply of mortgages,” McInerney said.

First-half revenue fell 42 per cent to €80.8 million, according to today’s statement.

The net loss widened to €171 million from €46.4 million. Excluding the writedowns, the net loss was €12.8 million.

McInerney said the main reasons for the fall off in housing sales was a “lack of mortgage access” and the higher levels of deposit being sought by banks.

Additional reporting Bloomberg