Financier ready for another battle as Ireland Inc fights for salvation
The One51 chief insists the fundamentals of Irish economy are still sound and we now have a golden opportunity to become one of the most efficient nations in Europe.
ALMOST two years have passed since One51 boss Philip Lynch used a little-known dairy conference to call for an all-party government in the interests of Ireland's economic salvation.
The demand generated a flurry of interest around the time, but then, as often happens, Lynch's comments faded into the white noise of disaffection and the status quo continued.
In the intervening two years, the day job has given Lynch plenty to occupy his time, most notably a high-profile (but ultimately unsuccessful) shareholder revolt at his investment firm One51.
The 64-year-old has also had his hands full with extracurricular activities, including chairing and dramatically quitting the board of the National Children's Hospital project.
But the national question has never been far from his mind, and hours after the most brutal Budget in Ireland's history was presented to the Dail, Lynch feels compelled to speak out once more.
Denouncing the "atrocious" handling of the economy over the boom-time, Lynch seems glad the country is finally getting a "pretty serious austerity plan" even if was "dictated by the ECB and the IMF".
But he takes serious issue with some of the decisions made, specifically that people on the minimum wage were "hurt" when the Government could have achieved the same savings by taking braver decisions.
Lynch is keen to talk about what could be done differently, but there's an elephant in the room demanding to be addressed. Is the man whose last published pay packet was €1.45m really in a position to empathise with the poor?
There's a quick intake of breath as Lynch contemplates the question. The €1.45m, which was famously denounced by former Bank of Ireland boss Mike Soden at a One51 AGM, wasn't "real" because it included an exceptional bonus for 2008.
"Everybody has taken a cut, including myself," Lynch adds. "I'll be earning a lot less this year."
But was anyone ever actually worth €1.45m a year? Was he? "It depends on the performance," he says. "But if that's our debate today, I'll lose this battle."
Whatever his affinity with the poor, Lynch can claim some authority on affairs of the economy having built One51 into an international powerhouse with assets spanning wind-farms to waste to Country Pride bread.
And having spent 16 years on various state boards, including a stint in the 1990s as chairman of An Post, he can also claim some insight into the question of how to get value from State-owned assets.
On this basis, he lays forth his own plan for getting Ireland's finances back into shape.
Ireland should begin by radically downsizing local government, since the 2,000 town councillors are "only inhibiting county managers from doing their jobs" and racking up expenses.
State assets should be sold off quickly, since the Government is exerting a "dead hand" on key sectors like media (through RTE), energy (through ESB and Bord Gais) and transport (through bus, rail, ports and airports).
Ceding ownership is the only way that the knowledge of the commercial sector can be leveraged to Ireland's gain.
"I served on state boards for 16 years, you can stupidly and foolishly think you can make a difference, but there isn't a damn thing you can do," he says. "The chief executive reports to the secretary general [of the given department], the board is only a cushion in between the two."
Concerns about a 'fire sale' generating a bad return for the taxpayer are swatted aside. "There's a huge appetite internationally to invest in Ireland," he says. "We know lots of good companies in the world that would love to participate in those businesses and would pay fancy prices for them."
Including his own One51? "We have talked about that [the opportunities to buy state assets], we'd all have to compete for them if they went up for auction," he says, but he's far keener to talk about Ireland than One51.
Eliminating waste in the political system and revolutionising the semi-states are Lynch's main platforms, but he has other ideas too, like incentivising tax exiles to come back to the country so they can spend their money here.
He also wants to see a steering group of Irish business experts come together to help get Ireland back on its feet. Top executives would give their time for free, he insists.
"I'd absolutely be involved," he says. "We all want to think we can make a difference."
While Lynch comes across as 100pc invested in project Ireland, he admits that events in the not too recent past could have seen his One51 up sticks to more hospitable business climes.
It wasn't the faltering economy that was getting to him, it wasn't even the threat to the hallowed 12.5pc corporate tax rate.
The thing that really sent a shiver down his spine was the prospect of Ireland forcing losses on the banks' senior bondholders.
"There would have been a huge disadvantage to One51 being here if Ireland had welched on the bondholders," he says.
"We're trying to attract people to invest in our company by buying our equities and loan notes, if we'd done this, no one would have given us a hearing."
With the spectre of defaulting on bondholders fading -- Lynch believes the IMF and ECB "won't allow it" now -- One51 sees "no disadvantage" to staying put even though it has substantial assets overseas.
"The fundamentals are sound for Ireland and the worst is over," he says. "We have opportunities now to cut costs and become the most efficient nation in Europe."
One51 seems to be through the worst of it as well. After suffering a 13pc fall in pre-tax profits last year and shedding about 25pc of its turnover, One51 has promised investors better results for 2010.
"We're on track to have a good year," Lynch says, adding that One51 is "constantly looking for good investments" even in the recession.
One investment which Lynch's group takes a lot of stick over is its failed takeover bid for Irish Ferries owner ICG.
One51 booked losses of €10m on its ICG stake in 2009 alone, but Lynch is standing by the investment.
"ICG has just sold off Bilbao [a ship] for a big profit, a lot of that money will be returned to the balance sheet and will be paid to shareholders over time," he says.
"ICG is already paying a super dividend and could pay more if it wanted to, so it's a very good investment and we're going to hang on in there."
And there's always the prospect of another bite at the takeover cherry.
"There might come a time when that might come back into play," Lynch says, "but we can't comment on that because ICG is a public company."
Whether it's confronting the Government on the economy or having another go at ICG, Lynch seems ripe for another good battle -- even though many of his peers are setting their sights on retirement.
"I'll stay as long as I'm capable or making a difference," he says. "I don't know when that runs out, but I've watched retired people and I'm not enamoured by what I've seen."