Local subsidiaries of US investment fund Cerberus Capital Management collected almost €33 million last year on Irish debts snapped up by the companies during the financial crisis, new figures show.
So-called vulture fund Cerberus was one of the most active buyers of developers’ and businesses’ property debts as the Republic grappled with the fallout from a financial markets collapse more than a decade ago.
Accounts lodged by Irish subsidiaries, Promontoria Aran and Promontoria Arrow, used to hold property loans the group bought in 2014 and 2015, show they collected €32.8 million between them from debtors last year.
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Promontoria Aran collected €26.97 million in 2023, down from €38 million the previous year, while Promontoria Arrow’s received €5.84 million from its debtors last year, against €11.7 million in 2022.
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Both companies have paid off loans to international banks that helped finance the deals. Promontoria Aran cleared a liability to Deutsche Bank in January this year with a final €6 million payment.
The company drew about €180 million from the German lender, which agreed to refinance the debt in 2018.
Promontoria Aran owed its immediate parent, a Netherlands-registered Cerberus subsidiary called Promontoria Holding 128 BV, almost €44 million on December 31st, under the terms of a loan giving the Dutch company the right to share in the Irish subsidiary’s profits.
Cerberus typically part-financed its Irish companies by lending them cash through Netherlands-based parents, which had to be repaid along with a share of profits paid as interest on the debt.
Promontoria Arrow owed its Dutch parent, Promontoria Holding 176 BV, €13.8 million at the end of last year after paying it €3.25 million during 2023.
It paid off a €56 million debt to Deutsche Bank in December 2022 that it had borrowed from the German lender in March 2020. It paid off an earlier debt due to Japan’s Nomura International and Austrian bank, Bawag, around the same time.
Cerberus used Promontoria Arrow to buy 1,900 property loans amounting to €6.25 billion for €740 million from the State’s National Asset Management Agency (Nama) in 2015.
The price was heavily discounted as property values had slumped leaving debtors unable to repay the loans.
The deal gave Promontoria Arrow the right to collect the debts or take ownership of the properties against which they were secured.
Opposition politicians led sharp criticism of the Government and Nama for selling the debts to Cerberus, as controversy surrounded another deal, known as Project Eagle, involving the agency and the US company at the time.
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However, Nama argued that it had to get the best deal possible for the State. The Government established the agency to take over and manage Irish banks’ property loans as the lenders were facing possible insolvency.
Promontoria Aran was the bigger of the two. In 2014, it paid Ulster Bank €1.35 billion for property loans totalling €6.7 billion. Debtors included former Independent MEP Mick Wallace, who subsequently clashed with Cerberus.
Mr Wallace was among the politicians who first began questioning the Project Eagle deal when he was a TD.
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