Last week the Irish Independent reported that NAMA had taken possession of a 400-piece art collection formerly owned by developer (and solicitor) Noel Smyth, the man probably most associated with the development of The Square shopping centre in Tallaght, south-west Dublin. His Alburn group has been involved in developments here, Northern Ireland, Scotland and England, and he was reported to be in the NAMA Top-20 developers last year. The Independent reported last week that Noel “was happy to work with NAMA on the transaction [disposal of art collection]” and in a statement reported by the Sunday Independent last weekend, Noel is quoted as saying “one of the things that happened when I was dealing with NAMA over this is that I had to sign a confidentiality agreement, while they were also supposed to keep my end of the business in confidence as well. Obviously, they didn’t do that. They have been spouting about it even though they only just picked up the art”
I interpret the above to mean that NAMA has just acted to take charge of the art collection, and that Noel’s real estate property assets are not affected. Presumably these real estate assets are suffering the usual difficulties with falls in asset prices but we don’t have any specific information. Except…
Noel’s Alburn group has an investment vehicle in the UK, Alburn Real Estate Capital CMBS which controls a portfolio of 45 British properties. The investment vehicle has issued bonds to fund itself and earlier this year it was being reported that Noel was trying to buy the bonds back at a hefty discount. However reporting in the Irish media seemed to have dried up in March 2011.
Fast forward to today and Britain’s Costar commercial property service is reporting that a company that seems to have some links to Noel’s Alburn has bought some junior bond debt in Alburn Real Estate Capital CMBS from the UK’s Co-operative Bank. A company called “Persanta” whose sole shareholder is Vincent Barrett has, according to Costar, the same registered office as the Alburn Real Estate Capital CMBS . Costar suggests in its reporting that the latest transaction might be an attempt by Noel to prevent senior bondholders who have lent to the investment vehicle, increasing their control of the vehicle. In the latest offer to the senior bondholders, Noel is reported to be seeking a GBP 500,000 annual management fee as well incentivisation fees and a once-off payment to reimburse costs incurred earlier this year by Noel in his attempt to buy back the senior bonds.
It is not clear if NAMA has any interest in the Alburn Real Estate Capital CMBS.
UPDATE: 4th November, 2011. Noel Smyth has told the Irish Independent that he is not connected to “Pearsanta” (not “Persanta” as reported by Costar) – “last night Noel Smyth told the Irish Independent that reports suggesting he has any connection with Pearsanta are wrong” and although Pearsanta and Alburn share the same registered address in the UK, that is said to be a coincidence as the address is of a firm of accountants which acts as the registered office of a large number of companies.
UPDATE: 8th November, 2011. Noel’s woes appear to be continuing with news reported today by the Irish Examiner that a non-NAMA bank, National Irish Bank (part of the Danske group) is suing Noel in Ireland’s commercial court (part of the High Court) on foot of loans to two companies, Monway Limited and Fitzwilliam Finance Corporation Limited. The corporate loans, totalling €9.6m apparently have Noel’s personal guarantees attached. The loans were for property and the purchase of a “bond”. The case will be heard at the commercial court in December 2011.
UPDATE: 20th April, 2012. Noel has reportedly changed his address! And moved to London. According to the Irish Independent today his address changed from Sandyford, Dublin to Tooting Bec Road, south London on 4th November 2011. Noel has denied the change of address is a precursor to declaring himself bankrupt in the UK and according to the Independent who spoke with hims yesterday “”If the suggestion is that the change is being done to pursue bankruptcy in England, absolutely not,” he said. “I have a successful business in Ireland, I have a successful business in the UK. It is tough at the moment, but I am getting on with it.”"
UPDATE: 16th May, 2012. According to a notice filed with the Irish Stock Exchange today, property receivers from Savills have been appointed to the 40 properties that comprise the UK Alburn Real Estate portfolio. This follows more than a year of various schemes to manage the portfolio of mostly non-London properties, schemes that have invariably failed. The Alburn portfolio is understood not to be subject to NAMA loans.
UPDATE: 4th July, 2012. According to an audit note to Noel Smyth’s unlimited Irish company Alburn, reported in the Irish Times today, “These matters include the provision by Nama of working capital facilities and financial support to cover certain operating cash requirements and the continued renewal by Nama of bank facilities..While the ultimate outcome of these matters cannot be assessed with certainty at this time, the directors are of the opinion that, based on the current discussions and the group’s ongoing relationship with Nama, there is no reason to believe that the continued support from Nama will not be forthcoming..This issue, together with an uncertainty regarding the collectability of a receivable from a group undertaking, which is set out in Note 2, indicates the existence of material uncertainties that may cast doubt on the company’s ability to continue as a going concern..and in our opinion, on that basis, there did exist at June 30th, 2011, a financial situation which, under Section 40(1) of the Companies (Amendment) Act, 1983 would require the convening of an egm of the company”. Soo.. suggestions of difficulties but the auditor says there is “no reason” to believe NAMA won’t continue to support the company. Presumably the auditors, KPMG took reasonable steps to investigate if this was indeed the position.