Irish Life fails to recoup €17m
Namail is the special purpose vehicle set up by the Government to enable private investors take a 51% stake in Nama, which would keep its liabilities off the national accounts.
However, Irish Life fell under state ownership earlier this year, pushing the State’s shareholding in Namail over 51%.
On Monday, it was announced that Irish Life had sold its stake to Walbrook Capital, although neither party would disclose the sum paid.
According to the Irish Life 2011 annual accounts, “on Mar 31, 2011, the board of Namail declared and approved a dividend payment of €0.09987 per share amounting to €5.093m. The amount of dividend per share was based on the 10 year Irish government bond yield as at Mar 31, 2011. The dividend was paid to the holders of B ordinary shares of Namail only.”
Based on these numbers that would be a dividend of 10% calculated on a dividend of €5.093m and €51m of ‘B’ shares.
Earlier the year, Finance Minister Michael Noonan gave this response about the dividend paid by Nama to Irish Life.
“On Mar 30, 2012, Nama also paid a dividend to the private investors of €3.46m with respect to its 2011 year-end. National Asset Management Agency Investment Limited reported retained profits of €8.46m at Dec 31, 2011, in its Q4 2011 Section 55 accounts after declaration of this dividend.”
Based on these figures, the last dividend paid by Nama to Irish Life was 6.8% calculated on a dividend of €3.46m and €51m of ‘B’ shares.
Ten-year Irish government debt is currently trading at roughly 4.5%, which means future dividends paid to Walbrook will be a much lower. Also, Walbrook is only eligible to recoup 110% of its initial capital investment at the end of Nama’s life, if the agency makes a profit.
Consequently, Walbrook’s outlay for a 17% stake in Namail is likely to have been heavily discounted to the €17m paid by Irish Life.
CONNECT WITH US TODAY
Be the first to know the latest news and updates
