I am very pleased with the progress made to date in the liquidation of IBRC. The special liquidators continue to implement the orderly and efficient wind-down of IBRC in accordance with the provisions of the IBRC Act 2013 and instructions that have been provided to the special liquidators by me under the IBRC Act 2013.
In relation to the timelines set out in my instructions, I can confirm that the special liquidators completed the valuation of IBRC’s loan assets by 30 November 2013 and substantial progress has been made on the sale of IBRC assets. Sales processes for these assets had commenced by 31 December 2013, as required, and it is anticipated that the majority of sales will be completed in early 2014.
The first portfolio sale brought to the market by the special liquidators was concluded successfully in early December where the Evergreen portfolio, a portfolio with a par value of €2.5 billion, achieved sales to third parties of 84% of the total portfolio at values above the independent valuations. This represented a very successful outcome for the special liquidators and is further evidence of the significant interest of international investors in the Irish economy and its future prospects.
There is an obligation on the special liquidators to ensure the assets of IBRC are sold at a price that is equal to or in excess of the independent valuations that have been obtained. Should a bid not be received that is in excess of the independent valuation obtained, the loan asset will be acquired by NAMA at the independent valuation price. Sales to third parties will help to reduce the total amount of assets which are likely to transfer to NAMA as part of this process.
The sales process plan and timeline has been developed following professional advice and in light of requirements of a robust and credible sales process. The special liquidators have also corresponded with all IBRC borrowers providing them with an opportunity to make written representations on the method of disposal of their loans and the criteria for determining who may bid for loan assets. Consideration was given to borrower representations, and the special liquidators are in the process of responding to these borrower representations.
Additional information not given on the floor of the House
The IBRC loan books have been divided into portfolios and subsequently subdivided into tranches, depending on the professional advice obtained, for ensuring the maximum value is obtained for the sale of the loan assets and also to reflect feedback received from borrowers from the representation process.
In relation to the repayment of the debt owing to NAMA as a result of the promissory note transaction, I am pleased to note that a total of €1.225 billion has been repaid to NAMA by year end. The moneys repaid reflect both the proceeds of sales processes completed to date and also the scheduled and, in some cases, accelerated repayment of borrower obligations during the year.
As the Deputy is aware, the terms of the promissory note transaction created a potential liability for the State should the value of the IBRC assets be insufficient to cover amounts due to NAMA. However, while the exact outcome of the liquidation will not be known with certainty until the asset sale process has completed, I am pleased to note that, at present, the special liquidators do not expect a further call on the Exchequer to arise.