1. GENERAL INFORMATION
The proposed creation of the National Asset Management Agency was announced in the Minister for Finance's Supplementary Budget on 7 April 2009 and the Act was passed in November 2009.
The Act established NAMA as a separate statutory body, with its own Board and Chief Executive Officer appointed by the Minister for Finance, in December 2009.
The main purpose of NAMA is to acquire assets in the form of property related loans from credit institutions which have been designated by the Minister for Finance as Participating Institutions under Section 67 of the Act. The original Participating Institutions were: Allied Irish Banks, p.l.c. ('AIB'), Anglo Irish Bank Corporation Limited ('Anglo'), Bank of Ireland ('BOI'), Irish Nationwide Building Society ('INBS') and EBS Building Society ('EBS').
On 1 July 2011 AIB merged with EBS. On 1 July 2011 the business of INBS transferred to Anglo and on 14 October 2011 the latter's name was changed to Irish Bank Resolution Corporation ('IBRC'). IBRC was subsequently liquidated on 6 February 2013. On 7 February 2013, the joint Special Liquidators were appointed under the IBRC Act 2013 and assumed the role of the primary servicer, and with effect from 12 August 2013, the role of the primary servicer of NAMA loans in IBRC is being fulfilled by Capita.
1.1 National Asset Management Agency Group
For the purposes of these financial statements, the 'NAMA Group' comprises; the parent entity NAMA, National Asset Management Agency Investment Limited (NAMAIL), National Asset Resolution Limited (NARL), National Asset Management Limited (NAML), National Asset Management Group Services Limited (NAMGSL), National Asset Loan Management Limited (NALML), National Asset Management Services Limited (NAMSL), National Asset JV A Limited (NAJVAL), National Asset Property Management Limited (NAPML), National Asset Residential Property Services Limited (NARPSL) and National Asset Sarasota LLC (NASLLC).
The Group and the relationship between NAMA Group entities is summarised in Chart 1.
NAMAIL was incorporated on 27 January 2010. NAMAIL is the company through which private investors have invested in the Group. NAMA holds 49% of the shares of the company. The remaining 51% of the shares of the company are held by private investors.
NAMA has invested €49m in NAMAIL, receiving 49 million A ordinary shares. The remaining €51m was invested in NAMAIL by private investors, each receiving an equal share of 51 million B ordinary shares. Under the terms of a shareholders' agreement between NAMA and the private investors, NAMA may exercise a veto over decisions taken by NAMAIL. As a result of this veto, the private investors' ability to control the financial and operating policies of the entity is restricted and NAMA has effective control of the company. By virtue of this control NAMA has consolidated NAMAIL and its subsidiaries and the 51% external investment in NAMAIL is reported as a non-controlling interest in these financial statements.
On 7 February 2013, joint Special Liquidators were appointed to IBRC under the Irish Bank Resolution Corporation Act 2013. On 11 February 2013, NAMA established a new NAMA Group Entity, National Asset Resolution Limited (NARL). The entity was formed in response to a Direction issued by the Minister for Finance under the Irish Bank Resolution Corporation Act 2013 to NAMA to acquire a loan facility deed and floating charge over certain IBRC assets. Consideration was in the form of Government Guaranteed debt securities and cash. The debt securities were issued by NAML and transferred to NARL via a profit participating loan facility. NARL is a 100% subsidiary of NAMAIL.
NARL is the senior creditor of IBRC (in liquidation), therefore funds received by the joint Special Liquidators are used to reduce the loan facility deed in the first instance. NAMA has no involvement in the liquidation process and the financial statements recognise funds received from the joint Special Liquidators and other transactions to facilitate the orderly wind up of IBRC arising from the Minister's directions under the Act.
NAML was incorporated on 27 January 2010. NAML is responsible for issuing the government guaranteed debt instruments and the subordinated debt, which were used as consideration in acquiring loan assets. The Government guaranteed debt securities issued by NAML are listed on the Irish Stock Exchange.
The government guaranteed debt instruments and the subordinated debt instruments, issued before the reporting period in respect of the original loan portfolio, were transferred to NAMGSL and by NAMGSL to NALML. The latter used these debt instruments as consideration for the loan assets acquired from the Participating Institutions.
The government guaranteed debt instruments issued during the reporting period in respect of the acquisition of the loan facility deed and floating charge over certain IBRC assets were transferred to NARL.
NAMA has eight subsidiaries:
NAMGSL acts as the holding company for its three subsidiaries, NALML, NAPML and NAMSL.
NAMGSL was incorporated on 27 January 2010. NAMGSL acquires the debt instruments issued by NAML under a profit participating loan (PPL) agreement, and in turn, makes these debt instruments available to NALML on similar terms. NAMGSL is wholly owned by NAML.
NALML was incorporated on 27 January 2010. The purpose of NALML is to acquire, hold, and manage the loan assets acquired from the Participating Institutions.
NAMSL was incorporated on 27 January 2010. Previously a non-trading entity, NAMSL acquired a 20% shareholding in a general partnership associated with the NAJVAL investment during 2013.
On 4 July 2013 NAMA established a new subsidiary, National Asset JV A Limited (NAJVAL). NAJVAL is a wholly owned subsidiary of NAMGSL. NAMA entered a joint venture arrangement with a consortium whereby a 20% interest in a limited partnership was acquired, and NAJVAL was established to facilitate this transaction. The Group is not able to exercise significant influence over the partnership, as the other 80% interest is held by one shareholder who controls the decision making of the partnership. NAJVAL's 20% investment in the partnership is recognised as an equity investment.
NAPML was incorporated on 27 January 2010. The purpose of NAPML is to take direct ownership of property assets if and when required. In 2011 certain land and development sites were acquired by NALML as consideration for the settlement of a guarantee held by NALML. At the reporting date ownership of property interests had transferred from NALML to NAPML. In addition minor non-real estate assets were also acquired by NALML and transferred to NAPML during 2012.
NAPML has three subsidiaries; NARPSL, NASLLC and NALHL:
On 18 July 2012 NAMA established a new subsidiary National Asset Residential Property Services Limited (NARPSL). NARPSL is a wholly owned subsidiary of NAPML, and was established to acquire residential properties and to lease and ultimately sell these properties to approved housing bodies for social housing purposes.
596 residential properties were delivered to the social housing sector by NAMA debtors from inception to the reporting date. This includes the direct sale of 378 properties by NAMA debtors to various approved housing bodies, the direct leasing of 54 properties and exchange of contract on 104 properties. In addition, 60 properties had been acquired by NARPSL and leased to approved housing bodies at the reporting date.
On 1 August 2013 NAMA established a new US subsidiary, National Asset Sarasota Limited Liability Company (NASLLC). NASLLC is a wholly owned subsidiary of NAPML, and was established to acquire a property asset located in the US, in settlement of debt owed to NAMA.
On 10 January 2014, NAMA established a new subsidiary National Asset Leisure Holdings Limited (NALHL). NALHL is a wholly owned subsidiary of NAPML and was established to acquire 100% of the share capital of two Portuguese entities.
The address of the registered office of each company is Treasury Building, Grand Canal Street, Dublin 2. Each Company is incorporated and domiciled in the Republic of Ireland, except for NASLLC, which is incorporated and domiciled in the US.
CHART 1 NAMA GROUP
