Dáil Éireann Debate, Thursday - 9 November 2017
46. Deputy Thomas P. Broughan asked the Minister for Finance the way in which NAMA is managing the recovery of the funding of approximately €3.6 billion it advanced to debtors and receivers since 2010; if a large number of these loans are being written off; and if he will make a statement on the matter. [47374/17]
Amharc ar fhreagraAs set out in my reply to Question No. 111 of 3 October 2017, NAMA may provide funding to its debtors and receivers to protect and enhance their assets so as to optimise their income-producing potential and disposal value. This is in accordance with section 10 of the NAMA Act which states that NAMA is required to protect or enhance the value of its acquired assets and to obtain the best achievable financial return for the State.
NAMA advances loans to its debtors and receivers for a range of purposes, primarily for capital expenditure purposes but also for essential current expenditure required to protect the value of assets including remediation works, health and safety requirements, security and insurance. For instance, it has been necessary for NAMA to incur significant expenditure on remediation work so as to enable unfinished or defective housing to be brought to a habitable standard.
I am advised that NAMA has advanced €3.6 billion in funds to its debtors and receivers from inception to August 2017, comprising both current and capital expenditure. I am further advised that the majority of loans have been repaid either by the debtor or receiver, or by the proceeds of loan sales.
I am advised that, of new funding advanced since 2010, €0.6bn is currently outstanding to NAMA and is being actively managed by the Agency, as it relates to debtors whose loans are still held by NAMA.
I am advised by NAMA that there has been no write-off of new funding advanced by it. The proceeds of an asset sale or of the associated loan sale are invariably greater than the amounts of new funding advanced against the asset concerned. Normally, sales proceeds are applied, in the first place, against new advances made by NAMA and the balance of the proceeds is then applied against the loans originally acquired from the participating institutions.
It is important to note that the realised proceeds from asset or loan disposals reflect the positive impact of any new funding advanced in order to preserve or enhance asset values. NAMA advise that, in the absence of new funding, the assets concerned would have deteriorated in value, the health and safety works would not have been completed and, as a result, the proceeds realised from their disposal would have been less than those actually realised.
