Zoe loan-to-value ratio 1.5 times Nama average
THE ZOE group has a loan-to-value ratio of 115 per cent based on the book value of its properties on a going concern basis at June last, according to figures filed in court by accountants KPMG to support the group’s case for survival.
Zoe owes eight banks €1.297 billion and values its properties at €1.1 billion at June 30th, 2009.
Valuers to the group told the High Court that the properties would be worth €644 million in distressed sales over six months. In that scenario, the loan-to-value ratio would rise to 200 per cent.
KPMG has said the group could emerge with a surplus of €19 million in July 2011 with a two-year moratorium on some bank interest payments. In this scenario Zoe would have a loan-to-value ratio of 118 per cent in July 2011, according to KPMG’s figures.
Minister for Finance Brian Lenihan said the average loan-to-value ratio for bank loans being acquired by Nama was 77 per cent.
This figure has been used to calculate the €54 billion price at which Nama will purchase loans with a book value of €77 billion.
The Government has said property value declines of 47 per cent put the current value of the loans at €47 billion, but Nama would overpay by €7 billion to account for long-term economic value due to the current illiquid market.