STATE ASSETS agency Nama is seeking to recruit a panel of advisers to aid in the sale of loans in Europe and the US, its chief executive, Brendan McDonagh, told a conference yesterday.
On the day it emerged that the agency earned €800 million from the sale of loans secured on London hotels such as Claridges and the Connaught, Mr McDonagh said Nama wants to appoint a panel of loan sale advisers to accelerate the disposal of the debts acquired from the five banks participating in the scheme.
Speaking at a corporate restructuring conference in Dublin yesterday, Mr McDonagh said loan sales are set to form part of Nama’s strategy now that it is almost through the its debtors’ business plans and has “gleaned considerable knowledge about the assets” and the developers who owe it money.
Its chief executive said the agency would be open to considering the sale of loans related to “individual assets, whole debtor connections or groups of loans by geography”.
He added that the involvement of advisers would help to ensure that any such sale followed a competitive process designed to achieve the best price possible.
Nama is also planning to offer its first staple finance package for commercial property within week two weeks. This involves investors paying 25 per cent to 30 per cent of a property’s purchase price upfront and then paying the balance to the State agency over an agreed period of time.
Mr McDonagh stressed that Nama will attach tough conditions to any purchaser who avails of the scheme.
“We will have to be satisfied as to their track record, reputation and capacity to repay,” he said. “They will have to be in a position to inject equity capital of 25 per cent to 30 per cent upfront. This will result in an immediate paydown of Nama debt and create a performing loan.”
The restructuring summit was organised by insolvency specialists Kavanagh Fennell, law firm AL Goodbody and Business Financemagazine.
A number of international speakers acknowledged that Ireland has taken difficult steps to deal with the banking crisis, and that this could have a positive outcome, but there were mixed signals about what the next step should be.
Jon Moulton, chairman of Better Capital LLP, argued that debt for equity swaps between banks and good companies with bad balance sheets should be happening frequently here.
He also suggested that the rate of corporate insolvency is too low, which is preventing a necessary clear out of non-viable businesses.
Justin Bickle, a partner with US fund Oaktree Capital, pointed out that examinership was the only real legal corporate restructuring mechanism.
He pointed out that secured creditors can easily derail any rescue plan proposed under that regime simply by arguing that they have an alternative that would give them a better outcome. He pointed out that there is no actual onus on such creditors to then go through with the alternative that they propose in court.
Nils Melngailis, managing director of multi-national restructuring specialist, Alvarez Marsal, told the audience that, given the weakness of European banks and the fact that Ireland has already tried to tackle its banks, the State could be seen as a “safe haven” within the next year.
“I’m sure that you will be talking a lot more positively a year from now,” he said.
“Hopefully the rest of Europe will not cause you too much trouble.”
