The special liquidators of Irish Bank Resolution Corporation (IBRC) have been given an extra four months by the Government to try and sell its €27 billion loan book.
When the State-owned bank was liquidated on February 7th, the Government said the sale of these loans would be completed by August, with any assets not offloaded then being transferred to the National Asset Management Agency, which would seek to sell them on over time.
However, Minister for Finance Michael Noonan has now given the liquidators – KPMG's Kieran Wallace and Eamonn Richardson – until midnight on November 30th to conclude the valuation process on the loans, and until December 31st to have agreed or completed the sale of assets in the bank.
This extended time frame reflects the scale of the task involved in selling about 6,000 commercial loans in the space of a number of months.
The Minister has also directed that two forms of discount be applied to the loans as part of the valuation process.
A discount rate of 4.5 per cent will be used to determine the value of future cash flows of the various loans while a discount of 2.3 per cent will be applied across all loans to reflect security and title issues associated with the assets.
The liquidators have appointed UBS and PricewaterhouseCoopers to carry out the loan valuations. It is understood that the valuation process has been under way for three weeks.
In a statement, a spokesman for the special liquidators said their objective is to “maximise the proceeds that can be realised from the sale of IBRC’s assets”.
They said assets would be sold where offers are received either equal to or in excess to the valuation placed on the loan. The liquidators said they would offer IBRC’s loans for sale as either portfolios of individual loans.
Borrowers and third-party bidders will be permitted to bid for the portfolios or individual loans if they meet certain predetermined criteria that have yet to be finalised.
When the loan valuations are completed, data rooms will be set up for borrowers and interested bidders to access information about the assets being sold.
The liquidators said they would be writing to the borrowers in advance of the sales process.
Separately, it is understood that IBRC’s mortgage book, which relates to Irish Nationwide, will be offered for sale in August or September. This book is valued at about €1.2 billion and comprises about 15,000 mortgages.
Loans held by staff or former directors of Anglo Irish Bank and Irish Nationwide are excluded from these processes. These are thought to amount to less than €500 million and will continue to be managed by the liquidators.
It is understood that staff at IBRC will be given clarity on their positions within the next fortnight. Just over 1,000 staff were employed by IBRC at the time of the liquidation and 12 per cent have since left the company. The staff face being made redundant when the bank is wound up.
IBRC holds loans with some high-profile companies in Ireland, including department store Arnotts, commercial broadcaster TV3 and fuel supplier Topaz. Businessman Denis O’Brien also holds loans with the banks.
Nama declined to comment yesterday on the Minister’s directions in relation to the IBRC loans.
