The National Asset Management Agency (Nama) has taken control of a subsidiary of building group BAM on foot of a debt dating back to a 2007 land deal.
Nama recently appointed Jim Hamilton and David O'Connor of accountants BDO as receivers to JPDC, a subsidiary of BAM, the Dutch-owned group that is one of the biggest players in Irish construction.
JPDC is a property holding company that sold a site in Carrigtowhill, Co Cork in 2007 to construction company John F Supple, whose debts Nama took over in 2010 and which was finally wound up two years later.
Common practice
While JPDC sold the property, it agreed to hold on to the legal title until John F Supple could develop it and sell it on. This was common practice at the time, as it allowed developers to avoid paying stamp duty on land purchases until they could profit from them.
However, as the building company was subsequently wound up, JPDC was left with the title. Its directors, including BAM Ireland chief executive Theo Cullinane, agreed Nama should appoint receivers as it was the easiest way for the agency to take control of the site, which it plans to sell.
In a statement, BAM said the receivership solely related to its subsidiary's interest in the legal title to the Carrigtwohill site. "The directors of JPDC have agreed this process, in consultation with Nama, as the most efficient means of Nama gaining full legal title on the site which had been sold by JPDC to a third party," it said.
“Nama has confirmed today that this process is to facilitate the ongoing sale of the related asset and that JPDC is merely a Nama obligor on foot of a guarantee.”
It also pointed out that the receivership had no implications for the wider BAM Group.
It is understood Nama plans to sell the site to the Department of Education, which intends to build a number of schools in the east Cork town. The agency sometimes sells properties of which it has taken control to other State bodies, but only at market prices. Nama itself did not comment on the receivership.
BAM has offices in Cork and Kildare. Its projects include a five-storey modern block on the corner of Dawson Street and Molesworth Street in Dublin, the court building in Waterford city and the Capital Cinema in Cork. It recently spent €3 million buying six new cranes that it needs to work on these and similar developments.
