Patrick O'Donovan (Limerick, Fine Gael)
Link to this: Individually | In context

Question 151: To ask the Minister for Finance the supports in place for construction companies whose debts have not been transferred to the National assets Management Agency; his views on whether construction companies who are covered by NAMA are at an unfair advantage; and if he will make a statement on the matter. [27251/11]

Michael Noonan (Limerick City, Fine Gael)
Link to this: Individually | In context

NAMA has a commercial remit to manage its portfolio of acquired loans and the property securing them in order to generate the best achievable financial return for the State. Following the transfer of a debtor's loans to NAMA, the debtor is requested to complete a realistic and concise business plan. The viability of the business plan of each major borrower is then assessed by NAMA. Where viability cannot be demonstrated or where a borrower is not co-operating with the process, NAMA takes enforcement action against the borrower concerned. By end-August 2011, NAMA had approved the appointment of receivers in 84 cases. Furthermore, to date, NAMA has secured the reversal of a significant number of asset transfers as part of its business plan agreements with debtors. I understand from NAMA that only a minority of debtors engaged in asset transfers to spouses, relatives or other parties but, in cases where it did occur, the reversal of such transfers is a key requirement imposed by NAMA before it can agree to a debtor's business plan.

The Chairman of NAMA has stated that, as the agency is charged with maximising the commercial return to the taxpayer, i.e., generating the maximum repayments on its acquired loans, it is regularly faced with difficult choices to make between working with a developer on his loans or foreclosing through the appointment of a receiver. The option selected by NAMA is whichever is likely to generate the higher return for the taxpayer. It is not a question of conferring any advantage on the borrower relative to borrowers whose loans remain with the banks. NAMA assures me that developers who are NAMA debtors do not enjoy any advantage over developers whose loans are with non-participating institutions.