NAMA paid €38m for the Irish Glass Bottle site loan (inclusive of Long Term Economic Value) – that’s less than 8% of the purchase price in 2006

I’m willing to bet that businessman Paul Coulson is smiling as he reads the Irish Independent today over his bowl of cornflakes. Chairwoman of the Dublin Docklands Development Authority (DDDA), Professor Niamh Brennan has been talking about the former Irish Glass Bottle (IGB) site in Ringsend which was bought in 2006 for €412m from the leaseholder (Paul Coulson’s South Wharf PLC) and the freeholder (our own State-owned Dublin Port Company). For detailed background to the transaction and how a €20m lease in 2002 grew in value to almost €274m four years later, take a look at two previous entries about the IGB site here and here. Paul Coulson seems to have been the only party (apart from the advisers of course) that has profited from this transaction.

According to Colm Keena in today’s Irish Times, NAMA acquired the Anglo loan secured by the site at an 87% discount – in general he is describing the Society of Chartered Surveyors annual conference so the implication is that Professor Niamh revealed the discount in her speech. The loan from Anglo to purchase the site was €288m (the remainder was ponyed up in equity by the DDDA, Bernard McNamara, a group of Davy investors and Derek Quinlan) and the purchase was concluded in January 2007. If the loan still presently stands at €288m, then that means that NAMA paid just €37.44m for the site which will include a contribution for Long Term Economic Value (average of 10% for Tranches 1 and 2). However NAMA are deducting a contribution for enforcement and due diligence costs and a premium and so far on average NAMA has been paying banks 103% of the current market value. If that applies to the Irish Glass Bottle site, then that would place the current market value (last November 30^th, 2009) at €36.3m – it is unlikely to have increased in value since then.

Professor Niamh, UCD accountancy professor and the wife of former Attorney General and Progressive Democrat, Michael McDowell, is relatively new in the job having joined the DDDA in March 2009 and she has waived her fees for her role as chairwoman – so she’s a clean sleeve. She described the purchase of the IGB site as one of the “big sins” of the DDDA but has appealed for the site to be developed in a way which enhances the area and not to some bottom-feeder that might seek short term gain. In the December 2009 DDDA accounts the site was valued at €50m, unchanged from the previous year. If the site is indeed worth €36m today then that means that the State has now realised €10m approx from a site worth €412m three years ago (the €138m received by DPC as freeholder in 2006 less the DDDA’s share of the losses to date). Paul Coulson’s Ardagh Glass is presently paying €1.7bn for tin-maker Impress Co-operative – maybe he should celebrate with a second helping of cornflakes.

UPDATE: 10th May, 2011. The Irish Independent, without citing sources, claims that the site is now worth €40m and that Paul Coulson in fact made €30m from the sale of the site to Becbay (the consortium which included the DDDA). The newspaper reports that Paul Coulson’s 34% stake in Ardagh, which is to be floated on Wall Street,  is estimated to be worth €750m. The Irish Times, also without citing sources, claims that the site is worth between €40-50m.