Nama agrees 'orderly' asset sales of €6.2bn

THE NATIONAL Asset Management Agency has approved asset sales of €6.2 billion, about 80 per cent of which are outside Ireland, its chief executive Brendan McDonagh has told a conference.

Nama is on course to make an operating profit of €600 million for 2011, Mr McDonagh told an investor conference hosted by stockbroking firm Davy.

He did not disclose the bad debt charge to be taken on loans with a book value of €31.7 billion.

Nama approved asset sales of €4.3 billion from January to October 2011, on top of €1.9 billion last year.

The disposal of assets will be “orderly and phased” to maximise the recovery from loans with a face value of €74.2 billion, he said.

“Nama will not hoard assets in the hope of generating speculative gains, nor will it engage in so-called fire sales. We will seek to identify opportunities to make capital investment combined with effective asset management with the objective of generating continuing cashflow while ensuring that we get the best price we can from each and every sale.”

Nama shares the proceeds from asset sales with other banks that co-financed property deals.

Mr McDonagh said the cash would be used to reduce Nama’s borrowings and help meet a target of repaying 25 per cent or €7.5 billion of its debt by the end of 2013.

There would be good opportunities to realise value on assets in Britain in the short term, he said.

Nama generated more than €5 billion in gross cash receipts to the end of November, and has approved €950 million of loans that will be used to advance or complete work-in-progress developments linked to its loans.

Some 63 insolvency appointments were approved this year compared with 30 in 2010. Nama will repay €2 billion of senior bonds before the end of the year to the banks that received the debts as payment for the loans.

Nama has also agreed to bankroll the purchase of one of its buildings to a buyer by providing “staple” finance under which it funds up to 70 per cent of the value of the property.

An affiliate of financial services firm Prudential has beat five other bidders to buy No 1 Warrington Place at the junction of Northumberland Road and the Grand Canal in Dublin. The property is worth about €27 million.

The State loans agency has agreed to provide vendor finance in an attempt to encourage prospective buyers to acquire investment property. – (Additional reporting Bloomberg)