The Irish government has published the draft legislation to set up the National Assets Management Agency to deal with the banks’ toxic loans – they’re still working on the value of the assets involved. Ministerial statement here, and RTÉ has provided pdf versions of the draft legislation, and the explanatory memo. Meanwhile, as the BBC reports, with the Dutch-owned ACC Bank seeking repayment of 136 million debt, a High Court ruling denying court protection to 6 companies within Liam Carroll’s Zoe group, which owes over 1 billion to 8 banks, has the potential to scupper the Irish government’s plans before the agency starts work – P O’Neill, who spotted this earlier, reckons Mr Justice Kelly should be NAMA’s CEO. And the Irish Times reports
Mr Justice Peter Kellys decision to refuse to appoint an examiner to six companies within Mr Carrolls Zoe group, which owes eight banks 1.2 billion, leaves the developers business vulnerable to insolvency action by Dutch-owned ACCBank and potential collapse.
The Irish Times financial correspondent, Simon Carswell, has a closer look at the situation.
If ACC appoints a receiver, other banks may be forced to move to protect their own securities given the contagion effect.
The two biggest lenders are Allied Irish Banks (AIB), which is owed 40.8 per cent of the groups total borrowings of 1.3 billion, and Bank of Scotland (Ireland), which is owed 26.8 per cent. They are followed by Bank of Ireland (9.3 per cent), Ulster Bank (6.7 per cent), Anglo Irish Bank (3.1 per cent), KBC Bank Ireland (1.9 per cent) and EBS (0.7 per cent).
These debts do not include loans in Mr Carrolls other groups.
The banks could follow another option by financing a scheme similar to settlement made to the groups unsecured creditors who were paid off in a deal funded AIB and Bank of Scotland (Ireland).
Rival lenders could take out ACC, the one dissenting bank by funding the repayment of part or all of the banks 136 million debt.
This would also ease one headache facing the States bad bank Nama, whose biggest customer is likely to be Mr Carroll. Given the scale of his debts he will be one of the first to be moved to the agency.