The Construction Employers Federation (CEF) and business advisory firm, Grant Thornton have said that local developers and contractors should start preparing their business plans in the expectation that the National Asset Management Agency (NAMA) could move as early as next month to examine asset-related loans in Northern Ireland.
Michael Neary, Corporate Finance Partner with Grant Thornton was speaking recently at a 'Preparing for NAMA' seminar in Belfast.
Mr Neary, who is already advising a number of property developers in Dublin, said local businesses could not afford to "sit on their hands" because of the wide ranging powers of NAMA and potential impact of the agencies decisions.
He said: "NAMA will expect borrowers to prepare a detailed business plan and provide full disclosure.
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"This means also looking at the assets and realistically planning on what can be done. The quality of a borrower's business plan will have a major bearing on NAMA's decision making process and every borrower will have an opportunity to present an updated business case.
"Time is now critical and it is incumbent on property developers in Northern Ireland to focus, prepare and plan in the expectation that local development loans could be part of the second tranche of loans to be bought from the participating banks in the next few months.
"Being proactive is vital and developers can't afford to sit on their hands," he said.
Developers will be expected to submit detailed business plans within 30 days after NAMA has acquired their loan.
Mr Neary explained that following NAMA's review of each developer’s business plan, and a financial review by an independent advisory firm, a decision will be taken whether to accept the plan, refer the developer to amend or revise the plan, or whether to reject it.
"If the plan is approved, NAMA will continue to work with the borrower and the borrower's subsequent performance will be monitored against the targets set out in the business plan," he added.
"In cases where the plan is rejected, or the borrower does not cooperate, NAMA will initiate the enforcement process."
Mr Neary said he was surprised that none of Northern Ireland's property developers featured in NAMA's first tranche of loans which represented ten of the largest loans valued at £16 billion.
(NS/BMcC)
