STATE ASSETS agency Nama’s determination not to sell properties below the value at which it acquired them is likely to result in few distressed asset sales over the short term, according to one investor.
Nama has made it clear that it will not embark on fire sales of properties that it controls in the Republic, nor is it prepared to sell assets for less than what it paid to acquire them in the first place.
Justin Bickle, managing director of the UK division of US investment fund Oaktree Capital, says that, as values fall in both the Republic and across the euro zone, maintaining this discipline will be important for Nama.
But, he says, the approach is likely to “result in less transactions for distressed assets purchasers in the short term”.
Oaktree Capital backed house builder McInerney Holdings examinership and was poised to invest up to €48 million in paying its creditors and providing it with working capital had it successfully emerged from the process. However, the courts refused to approve a rescue plan for the group. Writing in Kavanagh Fennell's Corporate Restructuring and Insolvency Review for 2011, which was published at the weekend, Mr Bickle points out that, from the perspective of anyone interested in buying or investing in distressed assets, Nama controls much of the market.
He points out that Nama’s influence is important, even when investors are looking at buying assets from banks outside the agency’s remit, as how it manages and sells its properties will have an impact on the overall market.
