Wednesday, February 22, 2012
Nama decided to proceed with appointing receivers over assets of various Treasury Holdings companies without telling the developer, which was in advanced negotiations with investors, the High Court has heard.
Treasury, run by Richard Barrett and Johnny Ronan, claims the proposed receiverships could threaten 400 jobs. It further claims that receivership could result in no further development of its Spencer Dock site in Dublin; could close the Ritz Carlton Hotel in Co Wicklow; lead to the closure of the company which owns Dublin’s National Convention Centre; and could collapse the Sligo Town Centre project.
Nama acquired Treasury debts with a face value of €1.5bn in 2010, but Treasury claims, while accepting it is "balance sheet insolvent", that it could have continued to operate had terms been agreed with Nama and could have advanced plans to achieve a "once-off sale" to investors of practically all its loans.
Treasury claims an investor, Macquarie Corporate and Asset Finance Ltd, offered €622m for its loan portfolio while a bid from Hines offered "a potential total return" to Nama and the Spencer Dock banking syndicate of €600m. Both those proposals required "significant" vendor financing by Nama, Treasury said.
Both offers were comparable with an €805m offer from US real estate firm, CIM, approved by the Nama board last year but which did not proceed, when allowing for the fact Battersea power station and other loans were not part of the portfolio being sold, Treasury said.
The "major benefits" to Nama and the State if such a deal was concluded would "far outweigh" the scenario offered by a group receivership, it claims.
Treasury’s goal was to exit Nama via such a once-off sale and it fears Nama’s actions in moving to appoint receivers will result in a piecemeal sale and the break-up of its "valuable portfolio", Michael Cush SC, for Treasury said.
He was opening a hearing before Ms Justice Mary Finlay Geoghegan of Treasury’s application for leave to bring a judicial review challenge to the actions of Nama and for injunctions preventing the receivers acting pending the outcome of any such challenge.
Nama’s "crucial" decision on Dec 8 to proceed with appointing receivers was not made known to Treasury until about a month later despite the fact both sides were in contact throughout December, counsel said.
The proceedings by Treasury and 22 related firms arose after Nama indicated it intended to appoint receivers to assets of the companies in Ireland, including the PricewaterhouseCoopers head office in Spencer Dock, the Alto Vetro building on Barrow St, and the Central Park office complex near Leopardstown.
The State, KBC Bank, Irish Bank Resolution Corporation, and the joint receivers — Luke Charlton and David Hughes — are notice parties to the case. The receivers have agreed not to take steps to sell assets pending the outcome of the continuing application.
The judge heard Nama strongly disputes Treasury’s claims and contends it had "engaged rigorously" with Treasury since 2010 but the group’s proposals on the way forward were not commercially acceptable.
The loans acquired by Nama include a €289m facility of Oct 2009 from former Anglo Irish Bank to acquire an 8.55-acre site at Central Park; other Anglo facilities of €272m dating from 2004 for lands at Spencer Dock; €34m loans from Irish Nationwide for the Tedcastle site at North wall Quay, and a €45m AIB loan for the Leisureplex site in Stillorgan.
The hearing continues.
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