In the beginning it was all going to be so different. There would be a Memorandum of Understanding, followed by Heads of Terms followed by a full Agreement between the NAMA developer and NAMA, and in many cases the wife of the developer. All would be solemnly signed by all the parties in a perfectly pyramidic approach to securing agreement between developer and NAMA. In the event, and after NAMA failed to even get a single agreement signed a year after it started acquiring loans, the pyramidic approach was abandoned and developers reported that NAMA was merely signing off on business plans, but they complained that agreements were only lasting a matter of months before they had to be renewed. In nearly all cases, NAMA has all the cards – or at least all the money – so NAMA calls whatever shots it wants.
It now seems that instead of any short term agreed business plan, NAMA is merely giving the nod and wink to developers. This week, the accounts for one of Northern Ireland’s main NAMA developers, MAR Properties, were published. The accounts are for the year ended December 2010 but have only been signed off in the last few days. Also published this week are the accounts of a MAR subsidiary, MAR (Argyle) Limited, which made a loss of GBP 10m (€12m) in the year ended December 2010 and has net liabilities of GBP 12m (€14m). MAR (Argyle)’s accounts were actually signed off a year ago, but the description of the agreement with NAMA is nonetheless curious
“As explained in the going concern note on the accounting policies, the company has continued discussions with NAMA about its future borrowing needs to allow the company to trade through the current difficult market conditions. The directors going concern assumption is dependent on the continuing support of its shareholders and the acceptance of the directors’ business plan which has been submitted, reviewed and verbally agreed by NAMA”
MAR Properties itself turned in a loss of GBP 23m for 2010 and had group net liabilities of GBP 40m at that date. Bank of Scotland and Ulster Bank provide facilities to the group, in addition to NAMA. MAR has a large number of subsidiaries operating in Northern Ireland, Scotland and England. The MAR group was founded in 1997 by Noel Murphy (“M”), Adam Armstrong (“A”) and William Rush (“R”) – the current directors are listed as Noel Murphy and William Rush only. The group developed residential and commercial property in Northern Ireland, Scotland and England. In January 2013, it sold the Cultra Railway Station in county Down. Some of its loans are in NAMA, and loans to MAR are understood to be one of NAMA’s largest exposures in Northern Ireland and no doubt NAMA will study the latest developments carefully. Just a week ago, Bank of Scotland moved on some of its Northern Ireland assets including commercial premises on Main Street and Castle Street in Bangor.