NAMA set to halt developers' spend on sponsorship
Maximise loan repayments, says bad bank
Published 19/08/2010 | 05:00
NAMA is to order the country's major property developers to halt spending on hundreds of sponsorships, with the agency describing such activity as "non-core expenditure''.
At present horse-racing, universities, schools and sports teams attract sponsorship from development companies and construction firms.
But NAMA has told leading developers they must "maximise'' repayments on loans and this means cutting out sponsorships, as soon as current contracts expire.
Developers have already been told to cut back on their living expenses, and in some cases the salaries they are drawing from their own companies, but the agency wants to also reduce spending more generally and sponsorship is regarded as an area where savings are possible.
NAMA said: "We are carefully reviewing the business plans being prepared by developers in order to maximise the repayment of loans to the taxpayer to ensure that no excessive expenditure is involved."
This move against excessive expenditure is likely to have widespread implications, with NAMA giving developers' instructions to cut back.
"And, where relevant, we are directing the borrowers to unwind any commitments to non-core expenditure as quickly as possible and subject to contractual obligations,'' the agency added.
Sources confirmed that "non-core expenditure'' will cover sponsorships.
It is not clear whether the move against sponsorships will involve all developers or just those with non-performing loans.
NAMA has not provided details on which of the top 10 developers have non-performing loans. In most cases, the developers have a mixture of performing and non-performing loans.
Over recent years some of the largest development companies have been actively sponsoring a whole range events, although its not clear individually which ones might come to an end.
Sean Mulryan's Ballymore Group, for instance, is associated with various racing events, with his Ballymore Properties know for sponsoring a number of races at Cheltenham. Ballymore has also sponsored GAA teams over recent years.
Treasury Holdings, controlled by Johnny Ronan and Richard Barrett, sponsor a large range of events, including college rugby and third-level qualifications in property. It also has links to the IRFU.
Building firm Michael McNamara and Co, controlled until recently by Bernard McNamara, has also sponsored academic chairs at TCD.
Another major development company, Mennolly Homes, controlled by Seamus Ross, has also sponsored racing events over recent years, mainly at Fairyhouse.