THE NATIONAL Asset Management Agency has said it will require a further €4 billion in property sales to meet the target set by the troika for the reduction in the agency’s debts by the end of 2013.
Brendan McDonagh, chief executive of Nama, told an Oireachtas committee that the State loans agency had approved more than €7 billion in asset sales since it first acquired loans and generated more than €6.6 billion in cashflow.
He estimated the agency would require asset sales of just over €9 billion to be able to repay the target of €7.5 billion, a quarter of its debts, by the end of 2013.
Asked if they were picking “low-hanging fruit” by selling assets in the UK, Mr McDonagh said Nama had to sell assets “where there is the greatest liquidity”.
Frank Daly, chairman of Nama, told the Joint Committee on Finance, Public Expenditure and Reform that recovering the €32 billion paid by Nama for the loans and the cost of carrying them would be “a huge challenge” but was confident it could be achieved.
The prospects of recovering the €74 billion face value of the loans “was not great” and “pretty weak” but the agency would attempt to recoup as much as it could.
Mr Daly told Fine Gael TD Liam Twomey that Nama was identifying properties that could be suitable alternative sites for the proposed national children’s hospital.
Mr McDonagh said the agency had received 150 applications from debtors or directly from their tenants seeking rent reductions, and that Nama had agreed reductions in 120 cases and was still assessing the remaining 30 applications.
The loans agency was realistic about the “what is happening out in the market” and was open to discussions with tenants, he said.
Responding to criticisms that Nama was “slow or lumbering”, Mr McDonagh said the average decision time took six days or less.
Nama has agreed business plans with 530 debtors, taken enforcement action against more than 180 debtors and has yet to assess the plans for another 60 debtors.
Two-thirds of the 790 debtors in Nama were working “constructively” with the agency, he said.
Mr Daly said the agency had decided not to bring 600 smaller debtors under its direct management from the banks as advised by former HSBC chief Michael Geoghegan in his report on Nama.
Instead, Nama plans to install five staff on rotation in each of the three banks – Irish Bank Resolution Corporation (formerly Anglo Irish Bank), Allied Irish Banks and Bank of Ireland – said Mr Daly.
Mr Geoghegan said that failing to bring the 600 debtors in within six months might increase the risk of Nama failing to meet its debt repayment schedule. Mr Daly said that the agency’s alternative plan would be kept under review.
Mr Daly responded to claims that Nama had frustrated job creation, pointing out one example where 230 jobs were created in Dublin through an investment facilitated by the agency.
The committee was told that about 9,500 people are employed in Ireland by Nama debtor companies and that €506 million in working and development capital loans has been provided to debtors in Ireland and €1.1 billion in total.
