Tuesday 12 December 2017

Project Tolka debtors had contact with final bidders

The Treasury Building where NAMA is based
The Treasury Building where NAMA is based
Ronald Quinlan

Ronald Quinlan

Nama's disposal of its €1.5bn Project Tolka portfolio is set to come in for renewed scrutiny following confirmation from Finance Minister Michael Noonan that two of the three final bidders for the loan book had expressed their interest in certain parts of its assets to the debtors prior to the sale.

Responding to parliamentary questions on the deal from Fianna Fail finance spokesman Michael McGrath, the minister said Nama had informed him that one of Project Tolka's final bidders had "expressed an interest to the debtor connection in one or more of the assets securing the loans in the portfolio" while another bidder had "expressed its interest to both Nama and the debtor connection".

Referring to other "informal approaches" that had been made to the debtors by potential bidders prior to the initiation of the loan sale process, he said it wasn't possible for Nama to compile accurate data "at this time" as the agency "no longer has an active engagement with the debtor connection".

Confirming his intent to pursue the matter of the Project Tolka sale further, Fianna Fail's Michael McGrath told the Irish Independent that he has now written to the Comptroller & Auditor General to express his concerns over the "apparent involvement" of certain Project Tolka debtors in selecting potential bidders for the loan book, and to request that the events leading up to the sale of the portfolio be examined.

Project Tolka, which consisted of loans mainly linked to developers John Flynn, Paddy Kelly and the Dublin-based McCormack family, who control the property investment vehicle Alanis, was acquired last January by the US investment firm, Colony Capital, for a sum in the region of €455m.

The price was some €5m above the reserve, understood to have been set in the region of €450m. The price paid by Colony represented a discount of approximately 70 cent in the euro based on the portfolio's €1.5bn par value.

Among Project Tolka's most significant assets is the Burlington Plaza complex on Dublin's Burlington Road. With an estimated value of €250m, it has high-profile tenants including Sky Ireland, Amazon and Bank of Ireland.

In acquiring the portfolio, Colony fended off bids from Lone Star and Madison International Realty.

A source familiar with the detail of the loan sale said Nama selected the three parties as bidders on the basis that their participation would be sufficient to guarantee 'competitive tension'.

While 16 parties with a potential interest in acquiring Project Tolka were identified, a number were deemed unsuitable as they were perceived to be "conflicted". One potential bidder is understood to have been ruled out on the grounds that Alanis, the property investment vehicle controlled by one of Project Tolka's major borrowers, the McCormack family, already acted for it.

Another potential bidder was deemed unsuitable as they were involved in litigation with another of Project Tolka's main debtors, developer John Flynn.

Elsewhere in his Dail response, the finance minister said Nama had written to all of Project Tolka's 180 debtors prior to the loan sale

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