Firms scramble for £100m Nama cash to fund projects
Published 12/10/2012 | 03:22
The big scramble for a share of tens of millions being doled out by ‘bad bank’ Nama is continuing after it put up more than £100m to fund projects from Northern Ireland firms.
Finance Minister Sammy Wilson has welcomed the bonanza and said 60% of the funding has already been used to develop properties in Britain and the remainder spent on assets in Northern Ireland and the Republic of Ireland.
There was no detail from Nama or the Department for Finance and Personnel about specific funding decisions made by the so-called bad bank, which has absorbed loans of £3.35bn secured on Northern Ireland assets.
Dozens of property companies across Northern Ireland have a relationship with Nama, which was set up to absorb toxic loans on property made by banks based in the Republic and now functions as a bank.
In some cases, where companies have gone into administration, Nama will effectively repossess their properties — but in other cases, developers can have business plans accepted by the agency and can secure funding for projects.
Speaking after a meeting with Nama, Mr Wilson said yesterday that the agency’s funding was a “much needed boost” for construction and property at a time when lending was limited.
“While £60m of this relates to projects that are located in Great Britain, they are in the main, being managed from Northern Ireland, helping to support further employment and business activity through these difficult times.”
He said Nama had told him that funding had been given to residential and commercial projects, and that there would be more funding in the future that would “benefit” Northern Ireland.
As most loans taken up by Nama were on commercial property, much of the investment had been made in that category, such as offices and shops.
Mr Wilson said the £100m investment was evidence that assets would be “carefully managed” by Nama instead of a so-called fire sale of assets.
Nama chairman Frank Daly has publicly detailed shopping centres and other developments in the Republic which have benefited from Nama funding, such as Dublin’s Charlestown shopping centre, which had received €13m.
But James Gibbons, principal of property advice firm GDP Partnership, said: “Given the fact that the debt book for Northern Ireland is in the region of £3.35bn, the funding which they have allocated is a mere drop in the ocean three years into the lifetime of the project.
A debtor, who wanted to remain anonymous, welcomed the news as a “step in the right direction”.
The Irish Government set up Nama in 2009 to flush out toxic loans on property from the banking system — otherwise Irish banks could have been brought down by the plummeting value of property on which it had issued loans. Nama began to absorb the banks’ loans on property, eventually taking on loans with a face value of €77bn (£61bn). The loans were swapped in return for €32bn (£24bn) in state-backed bonds. Nama has been accused of secrecy because it is exempt from the Republic’s Freedom of Information Act. It has an intended lifespan of 10 years to sell or manage properties to get the best return for Irish taxpayers. About 54% of its portfolio is in the Republic, 34% in Britain and 4% in Northern Ireland.