Failure of NI company costs Dublin banks £43m

Allied Irish Banks is one of the companies hit by the failure of Jermon Ltd

The failure of a major Northern Ireland property company will cost two Dublin banks an estimated £43m.

Jermon Ltd was placed into administration in January. It owned property in Northern Ireland, Scotland and other locations.

The firm, which was based in Dungannon, owed Allied Irish Banks and Bank of Ireland a combined £88m.

Administrators now say the banks will receive only about half that due to the collapse in value of Jermon properties.

The administrators report show that the bulk of the money - £63m - was owed to AIB with the balance of £25m owed to Bank of Ireland.

The report does not quantify the size of each bank's loss.

The £43m is not the full scale of bank losses associated with the company.

An earlier statement of affairs filed by Jermon's former owner, Peter Dolan, estimates that Anglo Irish Bank will lose £27m while Bank of Scotland Ireland (BoSI) will lose £39m. That is a total loss of at least £109m.

Anglo and BoSI are not part of the company administration procedure, instead they have appointed receivers to individual assets including Springhill Shopping Centre in Bangor and two properties in the centre of Dungannon.

Two related companies, Jermon Developments and Jermon Properties, were placed into liquidation in February.

Some of the properties which were part of the Jermon group have already been sold, or agreed for sale, including the Strabane Retail park and the Fanum House office block in Belfast.