The above title is deliberately false and misleading – the Minister for Finance Michael Noonan was this week asked in the national parliament of the State to provide details of the sale of the 17% stake in NAMA owned by Irish Life/Permanent TSB – which we own 100%/99.5% – and the answer to a series of questions was “that would be an operational matter” and with the exception of one interesting snippet, the Minister is not telling us anything about the sale of a 17% stake in our biggest state agency.
The one interesting snippet was that Walbrook Capital, the buyer of the 17% stake last month, was not the buyer referred to by Minister Noonan in his announcement of a sale in April 2012. Minister Noonan says “I can confirm that the transaction recently completed was not the transaction referred to in the Dail in April 2012 as a decision was subsequently taken, that Irish Life would engage a financial adviser to perform a wider marketing of the stake to Irish and international investors” Interesting that Minister Noonan didn’t reveal this in the barrage of questions on the April announcement which continued until the summer Dail recess.
Minister Noonan was being quizzed by the Sinn Fein finance spokesperson Pearse Doherty who wanted to know how much a company which we practically completely own got for its 17% stake in NAMA which was bought for €17m in 2010. He was practically told to “get lost” – not only does Minister Noonan claim the amount paid was commercially sensitive, but he also claims the costs incurred by our company – Irish Life/Permanent TSB – are also commercially sensitive though we are told that Davy Corporate Finance was engaged on the deal.
Minister Noonan refuses to say if Irish Life/Permanent TSB has any retained any liability in the stake, for example, if it has to compensate the buyer, Walbrook Capital, if certain dividends aren’t paid by NAMA.
Minister Noonan was asked to provide the terms that apply to the 17% stake, how dividends are determined and how the final value of the stake is evaluated when NAMA is eventually wound down. The response was to refer to the NAMA Annual Report* which merely says the maximum annual dividend is capped at the rate on the 10 year Irish government bond – presumably that is the current 8-year bond – and that the final return is determined by the Articles of Association of National Asset Management Agency Investment Limited which are presently being obtained.
The full parliamentary questions and response are here:
Deputy Pearse Doherty: To ask the Minister for Finance further to his announcement on 23 April 2012 that the 17% stake in the National Asset Management Agency, or specifically National Asset Management Agency Investment Limited, owned by what was Irish Life and Permanent in the residue of which, the Minister controls 99.5% of Permanent TSB and 100% of Irish Life was sold; if he will confirm that the party to whom his April 2012 announcement related was the same as the party whom NAMA announced was its new stakeholder in October 2012.
Deputy Pearse Doherty: To ask the Minister for Finance to confirm the actual sale price of the 17% stake in the National Asset Management Agency, or specifically National Asset Management Agency Investment Limited, owned by what was Irish Life and Permanent, which had a nominal value of €17m, and whether Irish Life booked any loss in its accounts on the transaction; in addition if Irish Life has retained any exposure on the stake after the sale, including a commitment to buy-back the stake or to guarantee a minimum return to the buyer..
Deputy Pearse Doherty: To ask the Minister for Finance further to the announcement of the sale of the 17% stake in the National Asset Management Agency, or specifically National Asset Management Agency Investment Limited, owned by what was Irish Life and Permanent, the sales process undertaken by Irish Life so as to secure the best deal for the taxpayer..
Deputy Pearse Doherty: To ask the Minister for Finance further to the announcement of the sale of the 17% stake in the National Asset Management Agency, or specifically National Asset Management Agency Investment Limited, owned by what was Irish Life and Permanent in the residue of which, the Minister controls 99.5% of Permanent TSB and 100% of Irish Life if he will confirm the costs incurred by Irish Life in selling its stake including fees paid to promoters and external providers of legal and other advice..
Deputy Pearse Doherty: To ask the Minister for Finance further to the announcement of the sale of the 17% stake in the National Asset Management Agency, or specifically National Asset Management Agency Investment Limited, owned by what was Irish Life and Permanent in the residue of which, the Minister controls 99.5% of Permanent TSB and 100% of Irish Life if he will set-out the terms of the share holding; the entitlement to dividends and the method by which any ultimate value of the stake will be determined when NAMA is wound up..
Deputy Pearse Doherty: To ask the Minister for Finance further to the announcement of the sale of the 17% stake in the National Asset Management Agency, or specifically National Asset Management Agency Investment Limited, owned by what was Irish Life and Permanent in the residue of which, the Minister controls 99.5% of Permanent TSB and 100% of Irish Life; the consideration given to acquiring the stake by the Bank of Ireland, in which the Minister controls 15% of the ordinary shares and further controls preference shares recently valued at €1.5bn..
Minister for Finance, Michael Noonan: I propose to take questions 207, 208, 209, 210, 211 and 212 together.
I can confirm that the transaction recently completed was not the transaction referred to in the Dail in April 2012 as a decision was subsequently taken, that Irish Life would engage a financial adviser to perform a wider marketing of the stake to Irish and international investors. Irish Life appointed Davy Corporate Finance to run a competitive sales process which ultimately resulted in a company owned by the Partners of Walbrook Capital acquiring the 17% shareholding in NAMAIL. I am informed by Irish Life that the costs incurred by it in selling its stake in NAMAIL are commercially sensitive.
Irish Life does not now retain any interest in NAMAIL.
I am not in a position to disclose the consideration paid by the buyer due to contractual confidentiality restrictions.
Details of the terms of the shareholding are outlined on page 140 of NAMA’s Annual Report for 2011*
*Non-controlling interests in subsidiaries comprises ordinary share capital in subsidiaries not attributable directly or indirectly to the parent entity. In respect of the Group this represents the investment by private investors in the ordinary share capital of NAMAIL.
NAMA has, along with the private investors, invested in NAMAIL. NAMA holds 49% of the issued share capital of NAMAIL and the remaining 51% of the share capital is held by private investors.
Under the terms of the shareholders’ agreement between NAMA and the private investors, NAMA can exercise a veto over decisions taken by NAMAIL.
Under the shareholder’s agreement, the maximum return which will be paid to the private investors by way of dividend is restricted to the 10 year Irish Government Bond Yield applying at the date of the declaration of the dividend. In addition the maximum investment return to the private investors is capped under the Articles of Association of NAMAIL.
NAMA’s ability to veto decisions taken by NAMAIL restricts the ability of the private investors to control the financial and operating policies of the Group, and as a result NAMA has effective control over NAMAIL and the subsidiaries in the Group, as well as substantially all the economic benefits and risks of the Group. While the private investors are subject to the risk that NAMAIL may incur losses and the full value of their investment may not be recovered, they are not required to contribute any further capital to NAMAIL.
By virtue of the control NAMA can exercise over NAMAIL, NAMA has consolidated NAMAIL and its subsidiaries, and for the purposes of recognising the non-controlling interests in the subsidiaries, the losses have been attributed to the non-controlling interest only up to its equity interest of €51 million.
NAMA Wine Lake 