Dáil Éireann Debate, Thursday - 9 May 2013
46. Deputy Gerry Adams asked the Minister for Finance further to Parliamentary Question No. 153 of 30 April 2013, if he will confirm, if he is entitled to instruct the Special Liquidator KPMG or the independent professional valuers of PWC and UBS pursuant to the Irish Bank Resolution Corporation Act 2013 to alter their preferred loan methodologys in order to ensure that the valuation of the total loan book of IBRC is at least €12.928 billion. [21918/13]
View answer60. Deputy Pearse Doherty asked the Minister for Finance if he instructs the Special Liquidator KPMG or indirectly the independent professional valuers of PWC and UBS pursuant to the Irish Bank Resolution Corporation Act 2013 to alter their preferred loan methodologies in order to ensure that the valuation of the total loan book of Irish Bank Resolution Corporation is greater than €12.928 billion combined with all the unguaranteed unsecured liabilities of the bank, the ELG liabilities of the bank and the Deposit Guaranteed Scheme liabilities of the bank that National Asset Management Agency’s acquisition of the remainder balance sheet of IBRC which is not sold to third parties would make all of those liabilities whole including providing an Exchequer boost of the €933.77 million the Exchequer has paid out for the ELG bonds as well as the £300 million of preference shares issued by him; and if he will make a statement on the matter. [21983/13]
View answer64. Deputy Pearse Doherty asked the Minister for Finance if the instructions given to the independent professional valuers of PWC and UBS, pursuant to the Irish Bank Resolution Corporation Act 2013, by the Special Liquidator KPMG or indirectly by him is to achieve the most accurate independent valuation of the current market value or whether the instruction given is to ensure that the total valuation of the total loan book of IBRC achieves at least €12.928 billion; if he will confirm that it would be advantageous to the Exchequer’s finances for 2013 that the independent valuation of the total loan book of IBRC is at least €12.928 billion in order to avoid additional Exchequer cost to meet the shortfall between the independent valuation and the price to which either the private investor or National Asset Management Agency will pay for the cumulative total balance of the loan book; if he will confirm whether NAMA is concerned that his interests are not aligned with those of NAMA who could be forced to take on assets at a larger price than it is able to sell in the short or medium term thus prolonging the retention of the IBRC assets by NAMA in order to avoid him facing up to losses now rather than in the future if NAMA make a loss on these assets [21987/13]
View answerI propose to take Questions Nos. 46, 60 and 64 together.
The Special Liquidators have responsibility for the appointment of independent valuers to value the assets of IBRC.
Section 9 of the IBRC Act provides that the Minister shall issue the Special Liquidator with instructions setting out the details of the manner in which the winding up of IBRC is to proceed. Section 9 also gives the Minister the power to give a direction to the Special Liquidator if he is of the opinion that it is necessary for the achievement of any of the purposes of the Act to do so. The Minister may revoke or amend the instructions to the Special Liquidator. A Special Liquidator shall comply with any instructions issued or directions given under the IBRC Act.
Section 14 of the IBRC Act requires the Minister to issue an instruction to the Special Liquidator as to the manner, consistent with the purposes of the IBRC Act, in which bank assets to be bid upon by NAMA, in accordance with a direction given under Section 13(1)(a), are to be valued; and to appoint a person to carry out an independent valuation of those bank assets.
Section 14 of the IBRC Act provides that the valuation of loan assets shall be valued using discounted cash flow analysis, taking into account the timing and reliability of cash flows, together with an appropriate discount factor to determine the value or, where appropriate, in accordance with other standard loan valuation methodologies.
The specific valuation methodologies to be employed will be agreed between the Special Liquidators and the independent professional valuers appointed by the Special Liquidators. However, in their determination of the valuation methodologies that ought to be employed, the Special Liquidators are required to comply with Section 14 of the IBRC Act as well as any further instructions or directions issued by the Minister pursuant to the IBRC Act 2013. Apart for any prescriptions concerning the valuation methodologies to be applied contained in the IBRC Act and in any further instructions or directions issued to the Special Liquidators, the independent valuation of the assets is solely at the discretion of the independent valuers.
Pursuant to the directions issued to NAMA in accordance with the provisions of the IBRC Act 2013, NAMA will be required to bid for the assets of IBRC (In Special Liquidation) at a price equal to the independent valuation.
