There are many pages focussing on Leo Varadkar becoming the leader of Fine Gael and the soon-to-be leader of the country. It is reported that Fianna Fáil will vehemently oppose his plan to merge USC and PRSI into one social charge.
The Sunday Business Post reports that the potential investors in AIB have reportedly been told that they can expect repossessions of non-performing loans to increase after the sale of 25% of the government's shareholding to new investors via the public markets. According to the report, the bank is likely to hive off two loan books and its plan for a politically palatable mortgage-to-rent scheme may face opposition from the EU which would deem them not off-balance sheet and defeat the purpose of the exercise.
The Sunday Times reports that AIB shares will be priced in the range of €4.40-€4.90, according to confidential estimates provided to institutional clients by the stockbrokers hired by the government and AIB to advise them on the planned share sale. The investment case for AIB is predicated on rapid growth in mortgage lending, where the bank currently has 36% market share.
The Sunday Independent reports that AIB is expected to carry enough tax losses to allow it to avoid paying tax on its profits for up to 30 years, according to presentations given by the bank to stockbrokers and financial analysts in recent days. The bank has begun an investor road show after the government announced its plans to sell c. £3bn of its shareholding in AIB. Market analysts in the UK have likened an investment in AIB to a “play on the Irish economy”.
Back to the Business Post. Law giants DLA Piper and Pinsent Masons are planning to set up offices in Dublin according to the Law Society.
There is an article about the casualties from the AIB Belfry funds whereby lots of pensioners lost a lot of money. Many borrowed and only 2% of those surveyed claim they were encouraged to take professional advice. Conor Sheahan of CKS Finance is acting for the Belfry Investor Action Group.
The Sunday Times also reports that AIB has been repaid almost 90% of the funds it loaned to the £250m fifth Belfry property fund, but individual investors who put up a total of £66.5m, have lost their money. A creditors meeting was held last Thursday to wind-up the fund, which was attended by a lot of angry investors.
A number of global private equity firms are carrying our research ahead of a possible bid for Shell's 45% share in the multi-billion Corrib gas field off the Mayo coast. Vermillion, the Canadian gas company that already owns 18.5%, could be among the potential buyers of the stake.
Michael O'Leary has said the cost of having wifi on-board would add to fuel and the revenues achievable would not cover these costs, so it will not be adding wifi on board any time soon. It also sounds like technology and speed of integration is what is slowing down the selling of Norwegian and Aer Lingus flights through the Ryanair website. Ryanair is doing a €600m share buyback to return surplus cash to shareholders.
Tom Lyons reports on "how Harry Crosbie built up large investments in the south of France, Yahoo and Batman: The Musical before losing his fortune".
Newstalk and other Communicorp stations such as Today FM, 98FM and Spin FM are driving synergies and cutting their cost base. "Eleven journalists on the Newstalk digital team have been told to reapply for four jobs." All of the radio stations are going to locate in Marconi House according to the article.
A €4m takeover bid of Celtic Media by INM has been pulled according to the Business Post. Both parties agreed to pull the deal "by mutual consent".
Successful Irish music festival Body & Soul is moving to another European venue in 2019.
The Restaurant Association of Ireland has said a shortage of chef talent is curtailing their opening hours.
"A €25m fund set up last year by Pat Phelan [founder of Trustev] and Illann Power is being wound down after failing to find a suitable Irish start-up worth investing in." They got 1,016 enquiries but did not feel that any were capable of scaling to a global level. They said that apart from Newswhip, they saw nothing that excited them and they were in it to help, not to make money. Power said, "Top Irish companies who fit into the venture investment realm - Teamwork.com, Joe.ie etc. - have either no need or no interest in taking on venture capital funding." "They want to be famous in Dublin, want to go all the breakfasts, etc. and then be able to magic €200k to €400k and get some free money from the state".
24.7% of EIIS applications so far this year were rejected. Last year 15% were rejected, or 40 of the 261 applications. Earlier this year it was reported by the Business Post that c. 1/3rd of companies benefiting from the scheme fail within four years.
Goldman Sachs is said to be ensuring it gains control of Waterford's Whitfield Clinic ahead of a possible sale by appointing receivers to various companies which control it. The bulk of the debt originates back to loans provided by Anglo in 2007 according to the article.
Anne and Shelley Dolan of Clink fame, a posh hostel, have applied for planning permission to develop a nine-storey, 144-room tourist hostel close to Jervis Street Luas stop at 35/36 Abbey Street. They own and operate two hostels in London and Amsterdam.
Fransesca Comyn writes about how the dawn raids from the Competition watchdog, whereby it comes in and gets its hands on endless files, are unlikely to happen again after the recent Supreme Court judgment against such actions whereby the CCPC was ordered to return a number of files to CRH. The CCPC investigation is ongoing into an alleged abuse of Irish Cement Limited's dominant position.
Sinn Féin’s Northern leader Michelle O'Neill is interviewed in the Business Post.
Dominic MacSorley, CEO of Concern Worldwide, is also interviewed.
Cyril McGuire-led Infinity Capital and Niall Olden-led Kernel Capital have led an investment of €2.2m into Clare-based diagnostics firm AltraTech. According to its website, “AltraTech brings biotechnology, semiconductors and genetics together, in a portable battery-operated 1-hour viral RNA detection kit".
TVadSync, a company which enables advertisers to maximize return on ad spend by leveraging multitasking behaviours of television audiences, is set to raise €3m in a Series A round.
IBI Corporate Finance is sponsoring cricket's Leinster Senior Cup.
There is a feature on Deloitte's Best Managed Company awards and the type of companies it is looking to enter this year's awards.
Barry Whyte interviews Michael Carvill of Kenmare Resources.
Wicklow native Dalton Philips, who stepped down from as head of Morrison's last year, went in as chairman of Byron Burger and following the exit of his CEO, he is effectively caretaker CEO.
Word on the Street: "a couple of Ireland's tech multimillionaires have teamed up for a little private plane hire venture."
The monthly IT magazine Connected profiles the thirty most influential tech entrepreneurs under thirty.
According to a recent survey from Retail Excellence Ireland of retail park and shopping centre tenants, performance has improved generally around the county but some regions remain weak. Castlebar Retail Park was ranked as lowest while Dundrum topped the rankings.
Richard Curran’s piece:
- Despite a possible short-term cost (pointed out during the week by the Labour Party) to the government from the sale of 25% of AIB - whereby the estimated reduction in dividends to be received (down an est. €62.5m) is greater than the interest saving from paying down the national debt (est. €30m) - the rationale for the 25% sale is strong. Curran highlights that a partial sale now creates a market and price for the shares which should make it easier the sell further stakes in the future.
- Curran points out that only two county councils, Dublin City Council and Donegal, have published registers of vacant sites. This register will be used as a basis for charging a special levy land owners not making use of vacant development sites. This comes as NAMA’s CEO Brendan McDonagh came out last week blaming developers for hoarding sites, while developers in turn blame NAMA.
- Curran notes the difficult job ahead of Mike Quinn, the new Eriva (the company that manages Irish Water and the gas network) boss, in particular, requires a massive c. €13bn infrastructure upgrade programme but has no committed funding.
David Ehrlich, CEO of the country’s largest landlord, IRES, is interviewed in today’s paper. In his interview, he hits out at investment companies and private owners for hoarding development land on the expectation that prices will rise. He also highlights that many of the sites they’ve looked to acquire were un-serviced which made them unviable for development.
Planning permission has been sought to turn the site of the Dublin pub Scruffy Murphys, off Merrion Square, into a six-storey aparthotel. The site was on the market last year for €1m.
An investment partnership, Anglo Irish JCF1 LLP, which includes Anglo’s Sean Fitzpatrick, Ardagh’s Paul Coulson, developer Bernard McNamara, builder John Olan Sisk, and Paddy Power Betfair chairman Gary McGann, received c. $650,000 in distributions in 2015. Accounts filed for the partnership state its principal activity is to invest in a Cayman Islands registered fund entitled JC Flowers II Limited Partnership.
Martin Birrane, property investor and owner of Mondello Park race track, is planning on building a €27m development to include a 100-bed hotel and up to 80 holiday homes at Clonea Strand, Dungarvan, Co. Waterford.
The Strategic Banking Corporation Ireland (SBCI) is reported to be in advanced discussions about backing two new lenders. Both are reported to be in the asset-based finance space. The SBCI has also started sharing some of the losses from bad loans with its lenders which should result in cheaper interest rates for borrowers.
Ireland’s ethics watchdog, the Standards in Public Office Commission, levied c. €30,000 of fines on lobbyists for breaching new lobbying rules, primarily for late returns. 152 lobbyists received a €200 fine for late filing of returns.
Wexford businessman Karl Fitzpatrick has signed heads of agreement for the European distribution rights for Bricks 4 Kidz, one of the fastest-growing franchises in the world. “Bricks 4 Kidz builds on the popularity of Lego bricks to deliver quality, educational play.” Fitzpatrick already held the Irish distribution rights and operates centres in Dublin, Tipperary and Wexford.
Irish exploration company Falcon Oil & Gas is awaiting an Australian court decision on whether a ban on fracking in the Northern Territories should be maintained. Falcon owns 30% of a gas field that studies suggest could have c. 85 trillion cubic feet of gas – about 100 times bigger than Ireland’s Corrib gas field. Falcon owns the site with Australian partner, Origin.
Dan White has a full page of coverage of the government’s IPO of AIB.
Gavin McLoughlin interviews John Boyle, founder and CEO of Boyle Sports.
Sean Gallagher interviews Anna Fanthom, MD of Recruitment Plus.
Samantha McCaughren’s Ergo piece:
- Midland’s developer John Flanagan Developments has successfully refinanced its loans from Sankaty with the backing of AIB and Cardinal Capital. The midlands builder had his loans sold by Ulster Bank to Sankaty as part of Project Coney.
- TV3’s audiences are growing and on two days last month beat RTE’s viewer numbers. The station is running a number of new programming initiatives and has also hired former RTE executive Aoife Stokes to manage its factual and current affairs programming.
- Former RTE chief Noel Curran has been appointed as director general of the European Broadcasting Union.
Cormac Lucey thinks public sector pay rises could put Ireland back into the pain of budget austerity. The billions we are saving due to the reduced interest rate on our national debt is being consumed by the public sector rather than reducing our debt or reducing taxes.
Dermot Desmond is believed to have taken a c. 11% stake in Ecocem Materials, the fast growing low-carbon cement maker founded by Irishman Donal O’Riain and backed by Saint-Gobain, the French cement company.
Brian Carey’s Agenda piece:
- Carey thought that NAMA chief executive Brendan McDonagh’s swipe at developers for land hoarding last week was a diversionary tactic. McDonagh has previously said it was uneconomic for NAMA to build houses up until 2014. Carey makes the point it was surely uneconomic for developers as well. Carey also makes the point a lot of sites are now held by investment funds as opposed to developers, which are unlikely to sell the sites until the seven year hold period to avail of the capital gains exemption introduced by Michael Noonan is up.
The new Central Bank of Ireland office cost €127m. Walls Construction was the main contractor and received €71m. Architectural Aluminium was paid €13.35m; it installed the iconic gold coloured façade.
More than six months after bringing the assets to market, NAMA has pulled the sale of the Duke portfolio of 60 acres of development land and 66 residential properties, including the Portmarnock Raceway. Cushman & Wakefield was appointed to sell the portfolio. Guided to sell at €35.5m, the portfolio is believed to have attracted a bid of more than €30m. NAMA has now appointed receivers over the sites which is expected to further delay the development of the sites in the portfolio.
PTSB has relaxed its credit rules for mortgage customers, allowing them to borrow for longer and include more of their overtime and other earnings in loan applications.
Goldman Sachs has taken control of Clonyn Castle and its adjoining 125 acres of land in Co. Westmeath. Shane McCarthy of KPMG was appointed as the receiver.
Irish Life has lodged plans for an office block that could accommodate up to 1,300 workers at Earlsfort Terrace in Dublin city centre. The assurance and pensions company is seeking to demolish Seagrove House, a five-storey office building on Earlsfort Terrace and an adjoining office complex on Adelaide Road that is currently rented by the Office of Public Works. The proposed replacement building will be a seven-story building.
New Ireland, a life assurance company, has hired Niall O’Callaghan from pension and benefits consultant Mercer as it seeks to rebuild its management team following a spate of high-profile departures and retirements. Michael Murphy has recently taken over as managing director after Sean Casey stepped down unexpectedly. Murphy joined from Willis Towers Watson.
OpenHydro, a developer of tidal energy turbines, has raised €42.4m from DCNS, a French defence and energy group that is its biggest shareholder. The Dublin company said the investment was the first of two investment tranches that would total c. €90m. The funding will be used to expand the business from turbine development into commercial production at several sites according to Patrick Gougeon, chief executive of OpenHydro.
Direct lenders could account for up to 20% of the lending market in Ireland, mirroring the rise of alternative lending in America according to Robert Gallagher of Activate Capital, a €500m property fund that is backed by the Ireland Strategic Investment Fund and KKR. Gallagher believes the sector will continue to grow and fill the gap in property lending vacated by the pillar banks. There are now more than 20 direct or alternative lenders servicing the Irish market. Funders mentioned include KKR, WL Ross, Bain Capital (through Broadhaven), Morgan Stanley, WLR Cardinal Mezzanine Fund and Macquarie. Macquarie’s €300m debt refinancing of the Mater Hospital group was one of the largest direct lending deals in the last two years.
Draper Esprit, a quoted tech funder, plans to grow its Dublin office as part of a commitment to invest £50m in Irish companies by mid-2022. The Dublin office is headed up by Brian Caulfield.
Grosvenor Group, the property group owned by the Duke of Westminster, took in £112m from the sale of its interest in Liffey Valley shopping centre. It held a 27% stake which was sold to Bayerische Versorgungskammer (BVK) last December.
Kelly Martin, chief executive of Malin, the life sciences investment company, is to receive the bulk of his salary in shares in the future. Martin will receive 150k shares annually and a modest $75k salary. Martin was paid more than €3m last year, the bulk of which was equity-based compensation.
Griffith College, the private third-level college founded by accountant Diarmuid Hegarty, doubled its after-tax profits to €1.6m to the end of June 2016.
Carr Communications made a profit of €91k last year after paying its five directors shared remuneration of €478k.
Ecoburner, a Waterford company which makes burners for chafing dishes or bain maries, has received a €2.1m equity investment from existing shareholders, including Australian company Hubble Enterprises and convenience store entrepreneur Terence Mangan.
Nick Webb’s Inside Track:
- Bank of Ireland was fined €3.15m for breaches of money laundering and anti-terrorist financing policies.
- It is rumoured that Vodafone and Virgin are exploring a merger, joint venture or an asset swap arrangement in the UK. Any deal agreed will likely be replicated in Ireland.
- Eoghan McCabe, the chief executive of unicorn Intercom, has emerged as one of the backers of Front App, a start-up that is trying to reinvent email. McCabe has also invested recently in Mobilize, a motivational and organisational network for on-demand workers i.e. zero-hour workers.
- Supermac’s Pat McDonagh has emerged as a backer of Galway health and beauty supplement firm Revive Active. He has invested €200k in the business.
Niall Brady has a good article on the AIB IPO.
This week’s chief executive interview is with Kevin Donnelly, the Britvic Ireland boss.
In other deal news
On the 22nd of May, Avery Dennison Corporation, a NYSE-listed corporation, announced the acquisition of Longford-based Finesse Medical Limited, an innovator in the development and manufacture of healthcare products used in the management of wound care and skin conditions. Davy Corporate Finance and Arthur Cox advised Finesse on the deal.
Fora.ie, a website focusing on Irish business news and entrepreneurship stories, features Boojum, one of Renatus' investee companies, this week as part of its regular series of business profiles. The article is available through the following link: https://fora.ie/boojum-burrito-david-maxwell-3415169-May2017
@RenatusCapital tweets this week:
6.4% - The seasonally unadjusted unemployment rate for the month of may, a year-on-year decline of 2%, according to @CSOIreland.
1.6% - The year-on-year growth in the volume of retail sales for the month of April, according to @CSOIreland. @IrishTimesBiz
6.7m - The number of airline passengers that passed through Ireland's 5 main airports in Q1 2017, a year-on-year increase of 4%. @CSOIreland
1.5% & 1.6% - Year-on-year rise in average weekly earnings for private and public sector workers for Q1 of 2017, according to @CSOIreland.
3,000 - The number of hotel bedrooms to be added in Dublin by 2020, a 15% increase in the total stock, according to @SavillsIreland.
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