The National Asset Management Agency is set to receive up to €100 million as a result of agreements relating to bust Irish property developer Treasury Holdings and its former owners Johnny Ronan and Richard Barrett.
These include settlement agreements for two transactions relating to assets sold by Treasury to entities related to either Mr Ronan or Mr Barrett before the company was wound up in October 2012. Nama and the liquidators of Treasury had disputed these transactions.
It is understood that KBC Bank Ireland, another major creditor of Treasury, will also receive millions of euro as part of the settlements.
The windfall for Nama follows the sale by Mr Ronan and Mr Barrett of their interests in a Singapore-listed property company called Forterra Trust. This entity is involved in developments in China and was formerly known as Treasury China Trust, a company once associated with Treasury.
Mr Ronan and Mr Barrett have agreed to sell their 26.9 per cent shareholding in Forterra to Hong Kong-based investment group Nan Fung.
The businessmen, along with fellow former Treasury executive Rory Williams, received an aggregate €122.3 million for their shares. Of this, Mr Ronan is set to receive €42 million for his shareholding. Most of these funds are expected to flow to Nama as Mr Ronan is a debtor of the agency.
Mr Ronan also received €14 million for a put-and-call option relating to 3 per cent of Forterra's shares. Again, most is expected to go to Nama.
'Tail transaction' reversed
In addition, the so-called "Tail transaction" from 2010 has been settled. This involved the sale by Treasury of 23.5 million shares in Forterra to Mr Ronan and Mr Barrett for €100,000 in cash and €20 million in unsecured loan notes.
Nama, which took enforcement action against Treasury in January 2012, had sought the reversal of this transaction, arguing it undervalued the shares.
The businessmen have agreed to sell these shares to Nan Fung for €42 million. It is understood Nama and KBC will receive a premium to the €20 million that Mr Ronan and Mr Barrett owed via the loan note.
Separately, Mr Barrett has reached agreement with the liquidator of Treasury to value two former assets at €13.3 million rather than the €2.2 million he paid in August 2012.
These entities act as the property manager and the trustee manager of Forterra and earn substantial sums annually. Mr Barrett acquired them via a company called Oriental Management Services (OMS) just before KBC went to the High Court seeking a winding-up order against Treasury last year. These sales were disputed by Nama and KBC.
Forterra’s announcement to the stock exchange said Nan Fung has agreed to pay €17.46 million for OMS. It is not clear how much of this Mr Barrett will receive as intercompany loans owed to Treasury and certain fees have to be paid.
Whatever the outcome of the OMS settlement, Mr Barrett, not thought to be a debtor of Nama, has netted €36.3 million from the sale of his 20.2 million shares in Forterra. Nama said it was “pleased” to have resolved these matters. The agreements have avoided the need for litigation. The arrangements are subject to High Court approval.
