The proposed disposal by Nama of Project Tolka, a loan portfolio with a par value of approximately €1.5bn, looks likely to be delayed beyond August 31, the date by which it had been expected to be brought to the market.
he Sunday Independent understands that the finalisation of the agreement between Nama and the borrowers has been held back as efforts continue to perfect the title on a number of assets within the portfolio with a view to maximising its potential sale price.
While the loans in Project Tolka are in the main accounted for by a partnership comprising property developers and investors Paddy Kelly, John Flynn and the Dublin-based McCormack family, who control the property investment vehicle Alanis, it is understood that there are numerous other parties to the loans, whose signatures Nama wants to have in place in order to assert title on certain assets within the portfolio. It remains unclear how many signatures are still being sought.
A source familiar with the matter said Nama was hopeful of securing a price "approaching par" for Project Tolka and was pressing for as much as possible of the title documentation to be perfected in order to achieve that aim.
Commenting on the challenge the agency and the borrowers were facing, the source said: "There are some individuals whose signatures it just won't be possible to obtain as they have died. In other cases, the person may have left the country and it has been proving difficult to make contact with them."
The source added: "The complex nature of the loans has resulted in delay. In many cases, consortia were assembled for projects, meaning there were numerous borrowers. Nama wants to have the agreement of as many of these people as possible before proceeding with the sale."
Among the Project Tolka portfolio's most significant assets is the Burlington Plaza office complex on Dublin's Burlington Road.
With an estimated value of €250m, it is currently occupied by several high-profile tenants, including Sky Ireland, Amazon and Bank of Ireland.
Other valuable assets within Project Tolka include the Clarion Hotel in Dublin's Liffey Valley, the Belfield headquarters of betting giants Paddy Power and the former Harcourt Street children's hospital, which is now occupied by leading Dublin law firm, BCM Hanby Wallace.
It is understood that the four-star Carton House Hotel, developed by Paddy Kelly, is to be sold separately from the wider portfolio.
The Sunday Independent has also learned that Nama's aim to deliver on its oft-stated target of building 20,000 new homes by 2020 has seen it strip out a number of major residential assets from Project Tolka. Included in these are a 68-acre site in Bray, Co Wicklow and lands at Carrickmines in south Dublin. It has also secured a 10-acre site in Bray for the development of two new schools.
However, Nama's housebuilding plan could yet be frustrated, should the European Commission find in favour of a complaint submitted last December by property developers Michael O'Flynn, Paddy McKillen, David Daly, New Generation Homes CEO Patrick Crean and MKN Group director Brian McKeown. They have sought an investigation into Nama's provision of funding for property development, alleging that it may breach EU rules on State aid.
The sale of Project Tolka had previously been postponed in the summer of 2015. Nama pulled the sale as Mr Flynn was in talks at the time to refinance his loans with the agency.
Quite apart from its intention to bring Project Tolka to the market, Nama is also gearing up to dispose of Project Gem, a portfolio of loans with a face value of around €4bn, towards the end of this year. In contrast to the loans associated with Kelly, Flynn and the McCormack family, Project Gem is expected to sell at a substantial discount to its par value.
Last month, Nama selected Oaktree Capital Group as the preferred bidder for Projects Ruby and Emerald, a package of loans with a face value of €4.7bn.
The €2.5bn Project Emerald portfolio comprises loans to 16 borrowers secured against 236 properties, most of which are commercial, while the €2.2bn Project Ruby portfolio relates to 253 properties involving 15 borrowers.
Oaktree is understood to be paying a combined €800m for the entire Emerald and Ruby loan books.
According to its annual report, Nama held loans valued at €7.8bn at the end of 2015, down from €13.4bn at the end of 2014, The figures are based on the current, rather than nominal, value of the loans.