McInerney's Spanish subsidiary placed in administration

4th May 2010 16:24

Housebuilder McInerney Holdings is not putting any more cash into its Spanish business and this led its subsidiary Alanda Homes to appoint an administrator. Freehold apartment developer Alanda is in a market that is not expected to improve in the short-term. Creditors are expected to be paid from freehold sales. Although the subsidiary had net assets of €4.5m at the end of 2009, McInerney does not believe it will receive any distribution from the administration. McInerney had net liabilities of €92.6m at the end of 2009 and the Alanda administration is likely to lead to a further write-down. McInerney has two other subsidiaries in Spain but these are not in administration. These interests are the management of Alanda Club Marbella Limited and land ownership at Sotogrande.There was nearly €242m of borrowings due within one year in the balance sheet at the end of 2009. New Irish bank facilities were subsequently agreed even though McInerney was in breach of covenants. The UK facility was due to end on 30 April. Goldman Sachs has been appointed to advise on a potential share issue and more news on financing the company will be released at the AGM on 12 May.