Nama to examine developers' plans to repay €15bn

NAMA WILL shortly begin scrutinising developers’ proposals for repaying the €15 billion they owe to the State agency on foot of the property loans it took over from the banks last month.

As part of the Government’s scheme to bail the Republic’s five banks out of their property loan portfolios, Nama last month took over €15.3 billion worth of loans advanced to the top 10 developers in the country. This was the first tranche of debts amounting to €80 billion in total.

Those developers have since submitted business plans to the agency outlining how they intend to repay the debts, which Nama chairman, former Revenue chief, Frank Daly, has said the agency intends to recover in full. The deadline for the receipt of the plans falls next week.

A number of the developers have finalised their plans, while the others are in the last stages of preparing proposals in consultation with Nama, that meet its requirements.

Nama has lined up a panel of independent consultants, mainly, it is understood, from Britain, who will begin reviewing each plan and advising the agency on what steps it should take next.

The options open to Nama include working with the developers and allowing them to work through their debts and pay them off, or if the individual case warrants it, appointing its own receiver to recover the money.

The developers whose loans were taken over by the agency include Liam Carroll, Seán Mulryan, Bernard McNamara and Treasury Holdings.

A spokesman for Nama stressed yesterday that the business plans submitted by all developers involved had to be realistic.

“We have a very clear requirements for the business plans,” he said. “They have to be evidence-based, they cannot be aspirational and we want them to answer all the questions that we have asked them.”

He added that there was no question of developers simply giving a “power-point presentation and leaving it at that”.

Mr Daly said yesterday that borrower must set out how they plan to reduce their debt significantly over a three to five year horizon.

“And, for most borrowers, this means producing a list of assets which can be sold to raise cash which will, in turn, be used to repay debt,” he said.

Once the agency is working with the developers, it can question all aspects of their businesses, down to the salaries that the individuals themselves are taking out of their operations.

If the agency believes that individual developers’ costs or pay are too high and could affect their business’s ability to repay the money they owe, then it can order them to cut back.

Sources predicted yesterday that the process will lead to developers beginning to sell overseas assets in order to repay the money they owe the State.

Many of them borrowed cash from Irish banks, and Anglo Irish Bank in particular, to pay for properties in Britain, the US and Europe.

As Nama now owns these loans, and markets in those jurisdictions are likely to begin to recover ahead of the Republic’s, then it is likely that they will begin to sell these assets.

Not all the loans taken over by the agency are underperforming. Nama’s brief was to take over property loans held by all five institutions, AIB, Anglo Irish, Bank of Ireland, EBS and Irish Nationwide.