Sale of IBRC loan assets to be completed by end of year “or as soon as practicable thereafter”
The special liquidators of Irish Bank Resolution Corporation (IBRC), KPMG’s Kieran Wallace and Eamonn Richardson, said today that they have received further instructions from Minister for Finance Michael Noonan regarding the valuing and subsequent sale of IBRC assets.
“The objective of the special liquidation of IBRC is to maximise the proceeds that can be realised from the sale of IBRC’s assets in accordance with the IBRC Act 2013 and the ministerial instructions received under the Act,” said a spokesperson for the liquidators.
“This process requires the special liquidators to arrange for the independent valuation of IBRC’s loan assets and to conduct an open and transparent sales process wherein assets will be sold where offers are received that are equal to or in excess of the asset’s valuation price.”
In order to maximise the proceeds, IBRC’s loan assets will be offered for sale either as loan portfolios or individual loans. The decision to sell specific loan assets as part of a portfolio or individually will be decided by the liquidators following advice from the independent advisors.
While borrowers and third party bidders may be allowed to bid for portfolios or loans, they will have to meet certain pre-determined criteria that have not yet been finalised.
The liquidators have also been instructed to ensure that the valuation of IBRC’s loan assets is completed by 11.59 pm on 30 November 2013, and that the sale of IBRC’s assets “shall be agreed or completed by no later than 11.59 pm on 31 December 2013, or as soon as practicable thereafter”.
And they’ve been directed to instruct the independent valuers engaged in valuing IBRC loan assets to apply a discount rate of 4.5pc in determining the value of future cash flows of the relevant loan assets. The value of the assets will not exceed the gross amount owing (including principal and accrued interest) and all loans advanced since the special liquidation of IBRC will be valued at the gross amount owing in respect of these loans (including principal and accrued interest).
Finally, a discount of 2.32pc is to be applied across all loan asset valuations, to take into account security and title issues associated with the loan assets, to arrive at the valuation price.