Monday 26 June 2017

NAMA calls in Deloitte to judge REO plan

Emmet Oliver Deputy Business Editor

NAMA has brought in the accountancy firm Deloitte to pass judgment on a crucial business plan filed with the agency by Real Estate Opportunities (REO), which is majority owned by Johnny Ronan's Treasury Holdings.

The company's fate will be known by September, documents sent to bond investors also reveal. The company is facing two highly important rent reviews with two major tenants, FAS and Marks & Spencer.

REO, whose biggest shareholder is the Ronan and Richard Barrett-controlled Treasury Holdings, revealed recently it owes NAMA €997m after the agency took over loans given out originally by AIB, Anglo Irish, Bank of Ireland and Irish Nationwide.

FAS

"A business plan has been submitted to NAMA and is currently being reviewed, a process expected to be concluded by September,'' bond investors in REO's Irish properties have been advised. NAMA last night declined to comment on the review of the business plan or the precise mandate given to Deloitte.

FAS is the one of the largest tenants of REO in Ireland, with a large property on Dublin's Baggot Street.

A second rent review involving a Marks & Spencer store on Patrick's Street, Cork, is expected to be resolved next month, when an arbitrator publishes a finding.

REO's Irish portfolio benefits from occupancy of over 98pc, but rental streams are crucial so the company can improve or at least stabilise its debt to earnings position.

In 2006 REO packaged up loans on 16 individual properties into a vehicle called Opera Finance, which then sold bonds to investors in various tranches.

The €375m of properties securitised have 92 leases attaching to them, covering a total area of 674,718 square feet. A junior loan in this group has breached a loan-to-value covenant, but REO has made it clearthe loan is being serviced as normal.

Irish Independent

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