It was recently been reported in the media that Permanent TSB instructed Ernst & Young to begin the formal sales process of a project involving the sale of a €4 billion non-performing loan portfolio to unregulated funds. This project was to be known as Project Glas.
Among Ireland’s list of bailed-out banks, Permanent TSB has the highest ratio of non-performing loans. Over the past few years, there has been increased pressure from the European Central Bank on the likes of Permanent TSB and others to come up with credible strategies to reduce these levels of non-performing loans.
Not surprisingly, however, this prospective loan sale has been challenged within the Irish Government from opposition party Fianna Fáil who has stated that it will not stand for the sale. They intend to bring a bill to the Irish Parliament next week to insist that distressed bank loans can be sold only to regulated funds.
If the Fine-Gael led minority government insists that everything is fine, and that there is no need to extend regulation to Private Equity funds then a political crisis could well be on the cards. Fianna Fáil insists that there are alternative options that Permanent TSB and other banks should go down. These banks could sort out the loans themselves rather than outsourcing the problem to a Private Equity fund. Alternatively, all distressed mortgages could be offered at the same knock-down price to local authorities who could ensure that all families can stay in their homes and aspire to buy them back in time.
This is positive news in relation to the status of current loan sales in Ireland and there is real hope going forward that positive change could be implemented as to who loans can be sold on to. As present, unregulated Private Equity funds are not bound by the same Central Bank rules as other banks which we, at GDP Partnership, find totally unacceptable.
What should I do?
If you are unfortunate enough to be involved or due to be involved in a loan sale, you need to very quickly get a plan of action together to present to your new creditor. Do no wait any longer. This is too IMPORTANT an issue to ignore.
It is really essential that you are fully prepared and have the necessary funding in place to deal with potential enforcement of loans, calls on personal guarantees and asset sales. It is important that you ACT TODAY to deal with this eventuality.
With a Private Equity Company now taking the lead, engagement with the borrower will no longer be pedestrian in nature and difficult to make progress with. They will be in contact with you within the first couple of weeks in an effort to determine what your plans may be. Therefore, it is ESSENTIAL that you are fully prepared
Subsequently, it is very IMPERATIVE to take advice in this regard from a regulated team of debt advisors to plan for the future.
What we can do to help?
Since 2010, our Loan Sales team, as part of the GDP Partnership family, have had particular expertise in dealing with private equity funds, and we would like the opportunity to share this with you. As a result, our team are more than ready to engage and assist if you have been affected by this.
We would like the opportunity to share this with you. As a result, our team are more than ready to engage and assist if you have been affected by this.
Our Loan Sales team know what is expected and how to get you to where you want to go. We WANT to hear from you today because we WANT to help you today.