Ulster Bank takes over Banbridge Outlet store

Ulster Bank has taken control of The Outlet centre in Banbridge following financial problems for the developer.

The £70m store, the biggest factory outlet in Ireland, opened in 2007.

Ulster Bank said it was committed to working with the centre’s management to secure its long-term future. Developer Guernsey-based John Farmer has not commented.

BBC NI business editor Jim Fitzpatrick said the retail park had “fallen victim to the demise of the southern shopper”.

“It was conceived for an all-Ireland market with the developer citing the big savings that could be enjoyed by southern consumers.

“But the huge cost of underwriting the Republic’s banking sector has left Irish taxpayers with considerably less money to spend.

“That, combined with higher petrol costs, has removed the incentive for shoppers to head north for a bargain.”

Documents seen by the BBC show that the bank is holding The Outlet in a company called West Register (Northern Ireland).

It is the NI branch of a special group of companies set up by the bank’s parent company, Royal Bank of Scotland.

The purpose of this group is to hold troubled businesses that the bank thinks it should retain because of the possibility that they could recover some of their value.

For example, the Richmond Centre in Londonderry was bought by West Register last year after the company that owned it went bust owing RBS millions.

In May, an Ulster Bank mortgage relating to The Outlet was registered against West Register (Northern Ireland).

In a statement, Ulster Bank said the shopping centre had a strong tenant list making up its 82 stores, employing approximately 500 full and part time staff.

“West Register (Northern Ireland) Property Limited will work with the Centre’s management team to secure the long term success of The Outlet.”

What has Ulster Bank done?

The bank’s move suggests it has converted its debt into shares.
That would mean ownership of the business has transferred from Mr Farmer’s company to Ulster Bank.
The bank would then hope that the business’ performance improves and it eventually makes a profit.
Taken from the BBC website on 13/06/11. http://www.bbc.co.uk/news/uk-northern-ireland-13750531