Forestside and Foyleside report £10m pre-tax loss
The directors of the companies behind the Forestside and Foyleside shopping centres have filed pre-tax losses of more than £10m for last year.
However the losses, outlined in new accounts published by Companies House, appear the result of a significant revaluation of the Belfast and Londonderry retail complexes.
Almost £10m has been wiped from the value of Forestside (£75m to £65.5m), while £6.5m has been removed from Foyleside's value (£83.5m to £77m).
The shopping centres were previously held in a single company before being split into separate entities.
Accounts for Forestside Acquisitions Ltd show a £7.5m pre-tax loss in the year to December 31, 2018, while Foyleside Acquisitions Ltd posted a pre-tax loss of £3m.
Forestside Acquisitions reported a slightly improved turnover of £4.56m (+0.9%) for 2018, while turnover for the Londonderry shopping centre remained virtually the same (£6.6m).
Although incorporated in Northern Ireland, both firms retain the same directors and are controlled by companies based in Luxembourg.
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However, they are ultimately controlled by venture capital fund Kildare European Partners, which is registered in Bermuda.
According to the reports, the 2018 valuations were made by the directors of both companies "on an open market value for existing use basis".
It added: "The directors believe it is reasonable to hold the investment property at this value at the balance sheet date."
Despite the pre-tax losses in both reports, the directors have recommended the payment of dividends amounting to £5.9m for both businesses.
Directors Mark Fenchelle and Louis Paletta recommended the payment of a dividend of £2.6m for Forestside and £3.3m for Foyleside.
Mr Fenchelle is chief financial officer of real estate specialists Curzon Advisers in London, which has an exclusive arrangement with Kildare Partners. Mr Paletta is Kildare Partners' Dallas-based chief operating officer.
Dividends are paid to shareholders out of a company's profits or reserves.
A spokesman for Kildare Partners said: "We do not make public comments about our valuation or dividend policies."
Both companies also list bank loans totalling £93.6m that were due to be repaid on February 13, 2018.
In both cases, each company exercised its right under its arrangement with the bank to extend the loan to February 2020.
Kildare Partners was founded by London-based Irish-American billionaire Ellis Short, the owner and chairman of Sunderland FC until April 2018.
His fund bought the Foyleside and Forestside shopping centres in 2014 for a combined £135m.
Both retail complexes were previously part of an eight-strong portfolio of shopping centres owned by local businessmen John B McGuckian and Ken Cheevers.
Mr McGuckian is a former chairman of UTV, while Mr Cheevers is the chairman of construction group McLaughlin and Harvey.