Veteran developer Paddy Kelly is back in the news this week, with damaging reports in the Sunday Business Post that NAMA has issued a tender to its panel of five – nine, according to the NAMA panel displayed on the NAMA website – providers of Credit Verification (Investigative) Services to examine Paddy’s statement of affairs and the affairs of his family including the more famous son, Simon. NAMA hasn’t commented on the report, which has an odd aura about it, and we must hope that NAMA has not descended to megaphone communication with its developers, using specific media.
Today, we report that loans underpinning a project in which Paddy Kelly was a lead investor, the Hotel Phoenicia in Malta – website screen grab above – have been sold by NAMA.
The loans on the hotel are understood to have a face value of €21m. The original consortium of investors in the hotel in 2007 was led by Paddy Kelly but is understood to have included Luan Cuffe, Pearse Farrell (of Farrell Grant Sparks fame – often appointed as receivers by NAMA) and Alastair Tidey (son of Don Tidey, famed for being the supermarket executive kidnapped by the IRA in 1983). NAMA acquired the loans from the Irish Nationwide Building Society. It is understood that the investors, or a subset of them, attempted to buy the loans from NAMA but NAMA would not entertain their offer, in part because of proscriptions under the NAMA Act – specifically the proscription on NAMA selling assets back to the original borrower where the borrower is in default.
So, NAMA engaged NAMA’s head of asset management, John Mulcahy’s old firm Jones Lang LaSalle in Dublin to sell the loans which are secured on the upmarket hotel in Malta. There was a public process managed by JLL in London with a fixed closing date and JLL were successful in selling the loans to Mark Shaw’s Scottish property group, Hazledene and the purchase price understood to be €19m. So, all straightforward so far, NAMA acquired €21m of loans secured on property and sold them on at a 10% discount to their face value, so the taxpayer makes a loss on the deal of €2m-odd.
Claims that Hazeldene has discussed the sale of the loans to any subset of the original consortium were firmly rejected this evening by Mark Shaw, the chief executive of Hazledene.
Neither NAMA, JLL nor Hazledene had any comment on the matter at original time of writing, but Hazeldene has now confirmed that it acquired the loans after an open public competition, but that it has not had any discussions whatsoever with any subset of the original consortium about the sale of the loans.