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150 NI people to have Nama loans

14 May 10 16:24 GMT

Up to 150 developers and investors from Northern Ireland are likely to find their loans transferred into the Republic's bad bank Nama.

They could be held personally liable for the money and possibly bankrupted.

Nama has been set up to buy and manage mainly bad property loans held by Dublin-based financial institutions.

On Friday, representatives of Nama revealed a handful of developers and speculators from NI who owe over £100m and are likely to end up on its books.

The representatives were in Belfast to explain the workings of Nama.

Lending

Developers who hold Nama loans will have 30 days to produce a credible business plan for repaying the loans.

The aim of Nama is to remove bad or impaired assets from the banks' balance sheets, allowing them to rebuild their financial strength.

Ultimately that will allow them to start lending again and get credit flowing to businesses and home buyers.

It is also hoped that it will protect or enhance the Irish Republic's international credit rating.

The plan assumes Nama's 54bn euros debt will fall by 6.5bn euros per year from 2013 onwards, until Nama's wind-up in 2020.

Nama is acquiring about £70bn worth of loans (81bn euros) and about £4.25bn worth (5bn euros) relate to assets in Northern Ireland, most of it in land and property development.

The agency's chief executive Brendan McDonagh said: "In certain cases we will work with the borrower to build outside assets if it makes commercial sense to do so.

"In other instances, unfortunately - and this applies in a lot of jurisdictions - the loan has been extended on agricultural land on a purely speculative basis and therefore it would not be commercial for Nama to fund that development either now or maybe in the future."

Advisors

Earlier, it was announce that a leading businessman and the chairman of the Housing Executive have been appointed to advise Nama on the loans it will control in Northern Ireland.

It will be advised by Brian Rowntree of the Housing Executive and Frank Cushnahan, a management consultant.

Speaking following the appointment of Mr Rowntree and Mr Cushnahan NI Finance Minister Sammy Wilson said they would "bring a wealth of experience to the table."

He added that their input "will help ensure that Northern Ireland's interests are best protected over this period and are in no way disadvantaged by the implementation of Nama."

There had originally been fears that Nama could hold a "fire sale" of Northern Ireland assets but the Irish Republic's finance minister has assured that will not happen.

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