independent

Wednesday 16 April 2014

Arnotts' debt sale fuels questions at Nama

Shopping spree: Laima Sudeikyte and Salvija Zelve outside Arnotts, the iconic Dublin department store on Dublin's Henry Street

DAIL finance committee chairman Ciaran Lynch has called on Nama to clarify how heavily indebted developers on its books have become involved in bidding for loans currently being offered for sale by the special liquidator of the IBRC.

Mr Lynch's call comes just days after a press report revealed that Fitzwilliam Finance Partners – a company headed up by high-profile solicitor and property investor Noel Smyth – is bidding for ownership of the bank debt of the legendary Dublin department store, Arnotts.

Fitzwilliam – which has the financial backing of British retailer Selfridges – has already acquired €140m of loans owed by Arnotts to Ulster Bank, and is now in the running to bid for some €230m in loans owed by the Dublin store to the IBRC.

Mr Lynch said: "Nama needs to clarify in full the processes by which people who are subject to Nama can become involved in processes where they are acquiring assets or the loans associated with them for themselves or even on behalf of third parties. Nama needs to ensure that all its operations and those of the individuals on its books are subject to full public scrutiny and subject to the Freedom of Information Act."

A spokesman for Nama refused to make any comment when asked by the Sunday Independent if the agency had received an explanation from Mr Smyth on the nature of his involvement in the bid for Arnotts' bank debt.

"We don't comment on debtor matters," the spokesman said.

Noel Smyth was similarly tight-lipped on the subject when contacted yesterday and refused to make any comment.

A source close to the well-known developer insisted there was "no mystery" to his involvement with Selfridges, which is owned by the Canadian billionaire Galen Weston, and its efforts to acquire Arnotts' bank debt.

Speaking to the Sunday Independent, the source said: "Noel and his company were retained to act as advisor to Selfridges to put a proposal together in relation to how they were going to put a bid in for the Ulster Bank and IBRC loans behind Arnotts. In that process, the legal and tax advice was that it was better for Selfridges to use an Irish entity to make the bid using their money. . . It's Fitzwilliam making the bid but Noel doesn't have a red cent in the deal. He's just advising on it. There's no mystery to it."

Asked to explain how Mr Smyth didn't have any interest in the deal when the Fitzwilliam Finance Partners shareholders register shows that apart from his wife, Anne Marie Smyth, he is the only other shareholder in the company, the source said: "You can take it that when anybody puts money into a shell company, they'll have taken steps to ensure that any shareholding in that company is secured back to them and their nominees. You can take it 100 per cent that they're not Noel's shares."

And they insisted that Mr Smyth had informed Nama a number of weeks ago of his involvement as an advisor to Selfridges in its bid for Arnotts.

Separately, the Sunday Independent understands that Mr Smyth reached an agreement with Nama last June in which he agreed to step away from having any involvement with The Square shopping centre in Tallaght, where he had been an investor.

Under the terms of the same agreement, he has committed to work out his remaining assets over the next five years by developing and selling them.

"Noel is anticipating that the deal he has done will see him paying back Nama the money he has agreed to pay them in full by the end of that," a source close to the developer said of the deal.

Asked if Mr Smyth's agreement would see him repaying 100 cent in the euro, the source said: "Nama have put a price against the assets and Noel has to pay them back 100 per cent of that.

"If he fails to do that, well, then they have the right to call different shots."

Sunday Independent

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