NAMA agrees to review Agri Policy

 

NAMA AGREES TO REVIEW ITS POLICY IN RELATION TO FARM/LIVESTOCK RELATED DEBT

 

Following a number of representations and Dáil questions, Cork East Deputy Tom Barry has secured a commitment from NAMA to review its procedures where farming assets including livestock are concerned. Deputy Barry tabled a Dáil question before Minister for Finance, Michael Noonan, who confirmed that NAMA will carry out the review. Deputy Barry had asked for a specific internal NAMA committee dealing with agri-related loans. However, Minister Noonan said that “at this stage” such a committee is not necessary.

The Minister outlined: “The NAMA Board has established four statutory committees – the Audit Committee, the Credit Committee, the Finance and Operating Risk Committee and the Risk Management Committee – under Section 32 of the Act as well as two advisory committees – the Planning Advisory Committee and the Northern Ireland Advisory Committee – under Section 33. NAMA has acquired the property loans of about 850 debtors. The loans of the largest 180 debtor connections, accounting for €61 billion of debt, will be managed directly by NAMA. The rest will be managed by the institutions under delegated authority. It is expected that nearly all, if not all, debtors who have farming interests or a significant interest in agri-business will fall into the latter category of debtor. Accordingly, at this stage, it is not considered necessary to establish a committee or unit within NAMA dedicated to dealing with agricultural interests. However, NAMA has agreed to review its procedures where farming assets involving livestock are concerned.”

Deputy Barry had argued that, because of a blinkered approach to debt, NAMA is shutting down viable businesses, or leaving these businesses with little option but to shut down. Minister Noonan responded: “NAMA assures me that it is committed to contributing to the objectives of the National Asset Management Agency Act which, inter alia, require it to contribute to the social and economic development of the State, in addition to protecting the interests of the taxpayer by ensuring that the value of any assets securing its loans is not diminished. Furthermore, as part of the business plan process and ongoing management of the debtor relationship, NAMA is actively engaging with debtors to get their assets to produce income and is approving decisions relating to the underlying security including lease agreements between the debtor and third parties where it makes commercial sense to do so. There is no reluctance on the part of NAMA to approve commercially viable arrangements. NAMA assures me that it is a particular priority for the agency, where it has acquired loans, to minimise the adverse impact on the viability of any business or on the sustainability of any jobs that may be at stake. NAMA fully recognises the importance of ensuring the continued viability of businesses, which can generate cash flow to repay debt and provide sustainable employment.”

Minister Noonan continued: “I am advised by NAMA that it is currently developing sectoral policies which will govern its strategic approach towards key sub-sectors in its loan portfolio. However, its policy will be publicised only after the completion of the debtor business plan process. In that context, NAMA has advised that it has now reviewed the business plans of the largest 40 debtors whose loans it has acquired and that the business plans of most other large debtors are currently at advanced stages of preparation. A debtor’s business plan essentially consists of individual asset plans for each of his properties. For those debtors who can satisfy NAMA as to their viability, the agency will agree specific asset plans for each of their assets (whether that involves disposal or completion, etc.). In determining a plan for any asset, NAMA will assess the supply and demand for similar assets in the same area or region. In particular, the Agency will also be very mindful of whatever planning policies have been set by the local authority in each instance.”

ENDS