HEAVILY-INDEBTED investment company Boundary Capital is to delist from the Dublin and London stock exchanges and change its name to Fleming Capital, as it continues to negotiate with Anglo Irish Bank about extending its €39 million debt facility with the nationalised bank.
The move comes as the company, which has a net asset deficit of €29 million, revealed that it has taken an 86 per cent write-down in the value of its investment portfolio. Having revalued its €80.4 million investment portfolio to €29.2 million at the end of 2008, the company has now written down its value further to €11.2 million.
The net asset deficit increased from €6 million at the end of 2008 to €29 million at the end of 2009 with debt owing to Anglo Irish Bank amounting to €39.2 million.
Boundary’s investment portfolio included a 28 per cent stake in Arnotts and an investment in RQB Ltd, a property development company set up by developer Paddy Kelly which is now in liquidation.
According to the 2009 financial accounts for Boundary Capital, a revaluation of unquoted investments as at December 31st, 2009, decreased the net asset value by €0.38 per share. The net asset value per share is now negative to the tune of €0.54.
The company said this is primarily due to Boundary writing down its investment in Arnotts to nil.
Declan Cassidy, chief executive officer of Boundary Capital, said yesterday the timing of the announcement by Boundary had no connection to the news this week that Arnotts had come under the control of Anglo Irish Bank. He said the company continues to negotiate with Anglo Irish Bank about refinancing its debt and that the company intends to hold the investments until maturity.
“We hope that in time we will realise the value of the investments in a systematic and controlled way in the medium to long term,” he said.
Anglo Irish Bank had no comment to make yesterday on the announcement by Boundary Capital.
Boundary Capital was founded by financier Niall McFadden in 2007. In September 2009 he ceased to be a director of the company, although it is understood he remains a 45 per cent shareholder in the company.
According to the company, the decision to change the name of the company was part of the termination agreement with Niall McFadden last year, with Mr McFadden agreeing to retain the “Boundary” name.
Earlier this month the High Court upheld a judgment by National Irish Bank for some €8.87 million against Niall McFadden arising from his personal guarantees over an overdraft facility provided to RQB Ltd.
Accounts for Boundary Capital show that, despite engaging in little activity during the financial year 2009, the company netted a loss of €22.9 million for the year, due to a writedown on investments.
The company made a loss of €54.4 million in 2008.
Shareholders will vote on both resolutions – the change of name, and the proposed delisting from the London AIM and the ESM in Dublin – at the company’s agm on Monday, August 30th, in Dublin.
