In the Dail last week Minister for Finance, Michael Noonan revealed that NAMA had agreed overhead levels, presumably annual levels, of €55m in respect of 41 developers whose loans with the Agency amounted to €18.6bn at original par values. That according to the Minister represented 0.3% of the original par values. Which might sound like great value for money. After all, receivers and asset managers generally are said to get 1.5% of their assets under management according to NAMA – its chairman Frank Daly has said that before an Oireachtas hearing and NAMA’s 2012 projected costs also refer to insolvency/receivership costs being 1.5% of the assets under management.
So obviously 0.3% is considerably less than 1.5%. Of course the 0.3% relates to the original par values of the loans, it represents 0.7% of the value placed on the loans by NAMA with respect to November 2009 values – remember NAMA applied an average 57% haircut to the loans it acquired. And given the 20-30% declines in Irish property prices since November 2009 and the fact that NAMA paid a “long term economic value” premium of 9% of November 2009 prices, it seems that NAMA is in fact paying the 41 developers NOT 0.3% of the CURRENT MARKET VALUE of the assets under management, more like 1.1% of the CURRENT MARKET VALUE of the assets. Of course 1.1% is still less than 1.5% though presumably there is far more direct management of these loans by NAMA, whereas receivers would be expected to take practically all of the burden away from NAMA.
NAMA’s receivership costs and overheads paid to developers are set to come under increased scrutiny as the Agency continues in its asset management phase. Meantime, we learn today from Iris Oifigiul that NAMA has had receivers appointed to five more companies which seem to be controlled by two development groupings.
First up is Ashburton Construction Limited, the company controlled by directors Kevin McNulty and Conal Byrne. Interestingly NAMA made an application in Dublin’s High Court against this company and a related company PA Bello as well as the two directors personally. NAMA has now had Kieran McCarthy of Hughes Blake Chartered Accountants appointed as a receiver. This is the first time I believe this firm has been used by NAMA.
Next we have Coolfadda Developers Limited, the Cork-based development company whose current directors are listed as Vera Slattery, Conor Slattery and Geraldine Collins, the company secretary is Paul Collins. NAMA has had Ken Fennell of Kavanagh Fennell appointed as receiver to five developments in Cork and Kerry – (1) Killowen, County Kerry (2) Dunmanway Road/Convent Hill in Bandon, County Cork (3) Rathcoole, County Cork (4) Curryclough, Bandon, County Cork and (5) Sneem, County Kerry
Next up, we have what appears to be a related company to Coolfadda, Neidin Developments Limited whose directors are listed as Paul Collins, Conor Slattery and Anton Hunt, its company secretary is Conor Slattery. Again NAMA has had Ken Fennell of Kavanagh Fennell appointed as receiver to a 39-acre site in Kenmare, County Kerry and a 11-acre site also in Kenmare..
Next we have another related company, Veracon Limited whose directors are listed as Vera Slattery and Conor Slattery who is also the company secretary. Again Ken Fennell is the receiver and the property subject to the receivership appears to be 88 Main Street, Bandon, County Cork.
Lastly we have another related company, PGC Developments Limited whose directors are listed as Geraldine Collins and Paul Collins, who is also the cimpany secretary. Again Ken Fennell is the receiver and the property subject receivership also appears to be 88 Main Street, Bandon, County Cork.
Remember you can see a comprehensive list of Irish foreclosure actions by NAMA here and in this regularly updated spreadsheet.