Green Property, which owns the Blanchardstown shopping centre, is in advanced talks to acquire about €1bn worth of property from nationalised Anglo Irish Bank.
The company, which is owned by industry veteran Stephen Vernon, its management and Bank of Scotland, is expected to acquire the vast majority of investment properties owned by Anglo, most of which were originally earmarked for syndication to private clients of the bank. When the property market collapsed Anglo was left holding on to the assets.
It is not clear what sort of loss Anglo will make on the properties, many of which were purchased at the top of the market.
Currently deals of this nature being done in London in particular involve stapled financing which involves a loan commitment arranged by the vendor, which in this case would be Anglo.
It will be Green's second major portfolio purchase this year. In March it acquired a portfolio of British properties after AIB seized them back from Greek businessman Achilleas Kallakis, who is under investigation by the Serious Fraud Office (SFO) and City of London police for alleged fraud against the bank, and sold them on to Green.
AIB supplied €750m of debt to Green to facilitate the purchase. Anglo continues to have an interest in a number of properties including stakes in the Arnotts department store and a retail scheme on South King Street in Dublin, the planned Opera Centre shopping centre in Limerick which M&S was due to open in before pulling out and various properties in Britain.
Anglo and Green already had a relationship as the bank's Select Geared Property Fund was involved in a joint venture with the developer on a property in Britain. Anglo failed to syndicate that fund which planned to raise more than €250m from investors with a view to adding non-recourse bank borrowings of nearly €340m.
The government is expected a long term plan from Anglo by November.
It is understood this plan must deal with the sale of property assets that were originally purchased by Anglo for their private clients. During meetings with Anglo staff department officials have impressed upon the bank that excess assets must be sold, even if they return a price well below their original cost.
The bank's plan will include a long section on why it would not be advisable to wind up the bank. However the government is still looking for a way to wind down or merge Irish Nationwide, which has a far smaller balance sheet than Anglo.