Dáil Éireann Debate, Wednesday - 10 June 2015
72. Deputy Michael McGrath asked the Minister for Finance the date he learned that the actual loss to the Irish Bank Resolution Corporation on the Siteserv transaction in 2012 was €119 million, as recorded in the minutes of the board meeting of the corporation on 15 March 2012; and if he will make a statement on the matter. [22650/15]
View answerDetails of the approval of the Board of the sale and the financial impact to IBRC of the sale of Siteserv, including details of the proceeds, process and the €119 write-off, were included in the minutes of the meeting of the board of IBRC on 15 March 2012. The Siteserv transaction was announced to the Stock Exchange on 16 March 2012 and the Department received the minutes of the meeting as part of the monthly board pack later that month.
In its publicly reported half year results for the six months ended 31 October 2011, Siteserv reflected "Interest bearing loans and borrowings" of €156 million. The Stock Exchange announcement of the deal cited a cash consideration of €45.42 million at completion. It is understandable that based on these publicly disclosed figures, various commentators speculated that the resulting write-down suffered by IBRC amounted to c.€110m, being the difference between €156 and €45 million.
The minutes reflect that the board approved the proposal to proceed with the Sale of Siteserv for €48m with net proceeds for the bank of €44.3m arising from the sale of Siteserv in repayment of its outstanding borrowings. The proposal approved by the board included a write-off of the balance of the IBRC lending facilities of €119 million following the sale.
The concerns expressed by Department officials and raised by my officials and I in meetings with the management and board of IBRC in 2012, as contained in records previously released under FOI, focused on the execution and management of the sales process and whether the decisions taken maximised the potential proceeds from the sale. As can be seen from the records released under FOI the focus of the meetings was on the critical decisions taken by the bank and possible alternatives during the sales process and the proceeds would also have been discussed. In my discussions with IBRC in 2012 I was aware that a very significant write-down resulted from the sale. In addition, both the publicly available information and the details contained in the board minute would have been known to Department of Finance officials at that time.
The assurances I sought from the Chairman of IBRC was to ensure the maximum return was achieved for the taxpayer from the sale process.
