Northern Ireland

Dunergan Developments collapse costs banks £17m

The collapse of a County Londonderry housebuilding firm is set to cost a consortium of banks about £17m.

Dunergan Developments, which was based in Magherafelt, was placed into administration in July.

A statement of affairs filed by the company's directors showed it owed five banks a combined £24m.

However, the value of the company's sites has plunged to less than £7m.

The biggest creditor is listed as the Irish government's National Asset Management Agency (Nama), which is owed almost £11m but is only likely to recover about £2m.

Deep recession

Nama has taken control of billions of pounds of land and development loans made by the Dublin-based banks; in this case the loans were originally granted by AIB.

The other banks owed money are Bank of Ireland, Ulster Bank, Northern Bank and HSBC.

Dunergan's parent company, FP McCann, is owed £1.6m, none of which will be repaid.

FP McCann, a major civil engineering and manufacturing firm, is otherwise unaffected by Dunergan's insolvency.

The statement of affairs shows that Dunergan had more than 30 sites, mostly in mid-Ulster.

The Northern Ireland housing market is in a deep recession; prices are still falling, demand is far below its peak and banks are imposing tough lending criteria.

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