Minister for Finance Michael Noonan has said the National Asset Management Agency achieved the "best price" possible for taxpayers when selling loans associated with Cork property developer Michael O'Flynn to US investment group Blackstone.
The view emerged from a reply given by the Minister to questions from Mayo-based Fine Gael TD Michelle Mulherin about why Nama had not accepted a higher bid for the loans and if the State agency had followed proper procedure with its sales process.
In response Mr Noonan said: “I am satisfied that Nama adhered faithfully to its own stringent process for assessing competing bids in this case, and that it obtained the best price on offer to it having assessed the risks attaching to the bids received.”
Nama has never revealed the identity of the party that submitted the higher offer for the O'Flynn loans but it is believed to have been New York-based investment group Davidson Kempner. The higher bid is understood to have been less than €3 million extra to what Blackstone paid.
The Minister said the higher bid had conditions attached that were not acceptable to Nama.
“The differential [between the bids] was considerably outweighed by the execution risk that attached to the conditional bid and by potential negotiation over a warranty package, and it would have been unacceptable for Nama to put Irish taxpayers’ interests at risk in such circumstances.
“In the case of large loan and asset sales generally, compliant bidders cannot be expected to let their bids stand while a conditional bidder is allowed additional time to finalise an offer.”
Mr Noonan said the fact that Nama would consider only unconditional binding offers at the end of the phase two due diligence was made clear to all bidders in the O’Flynn process.