Buying out loans will be open to all, NAMA warns developers
Published 13/09/2011 | 05:00
The country's leading developers have been told by NAMA if they try to buy their loans out of the agency they will have to bid along with other interested parties.
NAMA chief executive Brendan McDonagh, addressing a seminar hosted by the Construction Industry Federation (CIF), is understood to have told the developers that while they can refinance their loans out of NAMA, this is not an automatic right.
Several developers have tried to buy their loans out of NAMA using funds from other foreign banks, only to have their bids rejected by the agency.
McDonagh also told the seminar that some developers were simply not prepared to work with the agency and would face enforcement action as a result.
In what was described as a hard-nosed message, McDonagh told the 150-strong audience that some in the industry had not adapted to the new reality of the crash.
Any deals to buy loans from NAMA, known as refinancing, would only be done in an open process and where other bidders were involved, said McDonagh.
The refinancing of loans is usually confined to performing loans where the full price of the loan is demanded. Most of the offers to refinance loans out of NAMA have come on assets held in the UK and US, it is understood.
It is understood NAMA has written to a range of developers in the last week telling them their loans must go into NAMA, despite their objections. About €2.6bn of loan transfers were objected to by developers, but most of these have been rejected.
Also speaking at the seminar was Tom Costello, managing director of John Sisk & Son, who delivered a radical speech on how the construction industry should change.
While the industry was now offering strong value and able to cater for the needs of foreign investors, he said the industry was losing skills, suffering huge company failures and dealing with the issue of non-payment of sub-contractors.
Mr Costello said there was a case to be made for a minister for construction and a national infrastructure authority.
He said money from the private pension industry should be channelled into infrastructure products.
He added that a new ministry could manage the traditional "boom to bust'' cycle common to construction.