Nama to get say in McInerney court battle


STATE ASSETS agency Nama is likely to have a direct say in efforts to rescue troubled house builder McInerney Homes when the High Court hears the case again next month.

Five companies in the group have been under the High Court’s protection from their creditors, including a syndicate of three banks owed a total of €114 million, since early September.

The banks, State-owned Anglo Irish, Bank of Ireland and KBC, want the group placed in receivership and are opposing McInerney’s argument that it should remain under the court’s protection until at least next month, while examiner Billy Riordan puts together a rescue plan.

The case is due back before the High Court in early November, by which time Nama will own the €30 million debt that the group owes to Anglo, giving the agency a direct say in the outcome.

It is also due to take control of the €50 million or so due to Bank of Ireland. The balance, which is owed to KBC, will not go into Nama as that bank is Belgian-owned and the agency is only taking control of debts owed to five Irish financial institutions.

This will be the first time that any loan taken over by the agency will be part of an examinership proceeding. McInerney and Oaktree Capital, the US fund that is seeking to invest in the group, want the banks to take a discount on the total amount due to them.

As Nama is due to take control of the bulk of the €114 million debt, it was allowed representation at the original hearing in the High Court last month. At that point, the agency said that it would not be making any pleadings in relation to the group’s bid for protection.

Nama has said publicly several times that its priority is to recover the full amount owed by developers on foot of the loans that it is taking over from the banks, irrespective of what it pays for them.

One proposal on the table involves Oaktree investing €10 million directly in the group companies that are under the court’s protection, and the banks accepting a €60 million final repayment of the loans due.

The High Court heard yesterday that Oaktree is willing to buy out the banks for a unnamed sum, but one that would be higher than the amount that the banks would make from a receivership.

The banks argue that they could recover up to €90 million of the amount due to them over an extended receivership. However, neither McInerney nor Oaktree are likely to agree with this figure.

The High Court heard that the examiner, Mr Riordan, a partner with PricewaterhouseCoopers, believes there is a reasonable prospect of the company surviving if a deal can be done with the banks, or if Oaktree buys out their debt.

However, the banks’ lawyer, Rossa Fanning, reiterated their opposition to continuing the court’s protection and said that the examinership should end, either immediately or within two weeks.

Mr Justice Frank Clarke ordered Mr Riordan to provide him with a further report on the 29th of this month. He extended the period of protection to November 2nd and scheduled a full hearing for November 5th.