A report by the Comptroller and Auditor General (C&AG) has criticised the National Asset Management Agency (NAMA) for failing to properly evaluate a series of loans sold in 2012 that led to them being disposed of for about €29m less than they perhaps could have been.

The C&AG said errors and poor analysis by NAMA meant the target price for the assets was significantly less than it should have been.

The loans in Project Nantes changed hands for €27m, when they could have fetched €56m, the C&AG found.

When acquisition costs and advances as well as disposal and non-disposal proceeds were taken into account, a net cash loss of €10m was incurred on the bundle of assets.

The loans were attached to properties here in Ireland, the UK and other European states.

They included hotels, offices, retail and industrial units and other residential properties.

The loans contained in Project Nantes were the residual assets left after the sale of seven other loans or tranches of loans connected to the Quinlan Partnership and managed by Avestus Capital Partners, which were bought by NAMA in 2010 for €123.6m, a 75% discount on their original value.

A year later NAMA's board agreed a target level it wished to eventually achieve for the entire portfolio.

That target changed and Avestus was informed of those changes as the assets were sold, withdrawn etc.

At the end the group of loans leftover became Project Nantes and the target price attached to the tranche was the residue of the overall Avestus portfolio target price.

NAMA agreed to sell the Project Nantes loans to Clairvue Capital Partners, a US company sourced by Avestus, in 2011 and a deal was done the following January to sell most of the loans to a Clairvue subsidiary based in Luxembourg.

However, according to the C&AG, errors and poor analysis by NAMA meant the residual target price that had been attached to the loans was much lower that it should have been, to the tune of €29m.

The C&G said NAMA did not secure, as it should have, independent current assets valuations of the loans or the underlying property collateral prior to the disposal.

It also said NAMA did not pursue a competitive sales process.

As a result it said there was no basis to conclude that NAMA achieved the best possible financial outturn from the sale of the Project Nantes loans.

The report does say however that had NAMA set a higher repayment target for the Project Nantes loans, there is no guarantee that a sale could have been concluded at that higher price.

Overall, taking account of NAMA's initial outlay, subsequent advances to the borrowers and the prices achieved for the eight sales of tranches of loans, the entire Avestus portfolio eventually realised a profit of €67.8m for the agency.

The entirety of that surplus was accounted for by the sale of loans related to two office developments in London.

The resolution of all the other loans in the Avestus portfolio only led to NAMA breaking even or making small gains.

NAMA told the C&AG that given the acquisition value for the Avestus loans of €123.6 million, it is strongly of the view that the value of the proceeds it received was the best commercial outcome achievable at that time.

The C&AG's investigation arose after concerns were raised at the Dail's Public Accounts Committee in 2018.

The concerns related to the adequacy of the process used by NAMA, the price achieved and whether the sale had breached the statutory restrictions on the sale by NAMA of bank assets.