What it says in the papers: business pages
HERE are the main business stories from this morning's papers:
***The European Commission has dropped moves to make the Government slash the cost of legal proceedings and make the legal sector more efficient.
High costs and the need for reform of the legal profession and other “sheltered sectors” of the economy had long been a bug-bear of the Troika during the bailout.
The long-delayed Legal Services Bill, introduced in 2011, has still not been enacted. But the Commission’s so-called country-specific recommendations for Ireland, published yesterday, focuses on four key areas only – deficit and debt reduction, health costs, jobs and mortgages.
***State agency NewERA has insisted that there are “detailed provisions” in place to guard against possible conflicts of interest regarding the provision of advice in relation to a sale of Aer Lingus to IAG.
The agency confirmed that checks are in place after it emerged that an investment index connected to one of the Government’s key advisers on whether to sell Aer Lingus has placed a ‘bet’ on the planned €1.36bn takeover of the airline by IAG.
The investment banking arm of global financial giant Credit Suisse is one of three firms appointed by Government agency NewERA to advise on whether or not it is in the interests of the State to sell its 25.1pc stake in Aer Lingus. The Irish Independent has learned that an investment index operated by Credit Suisse’s separate asset management arm has a position in Aer Lingus shares, hoping to turn a profit on a possible sale of the airline going ahead.
***Irish drinks company C&C, the maker of several popular brands such as Bulmers, plunged to a €67.8m full year loss after incurring a massive €150m write down.
The pre-tax loss for the 12 months to the end of February was a huge swing compared to the previous year when the Dublin-based company recorded a €95.5m pre-tax profit. The difference was almost exclusively due to a €150m impairment charge relating to the firm’s US operations.
Speaking to the Irish Independent, C&C’s chief executive, Stephen Glancey, admitted that “it wasn’t a great year” for the company, but added that the firm is now focused on investing long term and is currently eyeing acquisitions in the UK.
***Pressure is set to mount on banks to reduce their variable mortgage rates after a report from the Central Bank recommended a reduction to avoid a political response.
The Irish Times reports that in a report sent to Finance Minister Michael Noonan the Central Bank found that banks are not making unreasonable profits on lending but still said it would be advisable to reduce mortgage rates.
The news comes after the Government announced yesterday that it will put a new oversight system in place that will allow courts to overturn bank vetoes on personal insolvency arrangements under certain circumstances.
***Businessman Denis O’Brien can never be a private person because he is a “media baron” possessing the power wealth can buy, a barrister for RTÉ said in the High Court.
David Holland, the senior counsel for RTE, was arguing the State broadcaster’s case against the businessman’s application for an injunction preventing the broadcast of a report detailing his personal and confidential banking affairs with Irish Bank Resolution Corporation (IBRC).
Michael Cush SC, for Mr O’Brien, said the damage to his client if the broadcast went ahead was impossible to calculate. Mr Cush referred to the evidence of independent banking expert Marcus Trench, who swore an affidavit for the O’Brien side in which he said Mr O’Brien’s relationship with banking institutions, including the terms of credit extended to him, would likely be damaged.
***Ulster Bank has started writing to thousands of account holders who had their loans sold to a third party and recommending that they make alternative banking arrangements, according to the Irish Times.
The paper reports that the loans are part of a portfolio sold by Ulster Bank’s parent company Royal Bank of Scotland to a Cerberus-controlled entity.
Approximately 1,200 debtors are involved in the loans, which are made up of more than 4,000 accounts. The paper reports that overdrawn customers will have their accounts transferred to Cerberus unless they switch to a different institution.
***Despite the Coalition claiming a victory yesterday after the courts were given the power to overrule bank vetoes on personal insolvency arrangements the measure has only ever been used 115 times, the Irish Examiner reports.
The Insolvency Service of Ireland confirmed to the newspaper that less than one deal a week has been vetoed by the banks since the insolvency measures were introduced in 2013.
The news coincided with the announcement of the long-awaited mortgage arrears package, which will also expand the role of the Money Advice and Budgeting Service (MABS) in assisting borrowers in arrears.
***Amarenco, the solar energy business headed up by former Bord Gais chief executive John Mullins, has found a backer for a plan to invest as much as €180m in an Irish solar energy project.
The Irish Examiner reports that Sydney-headquartered Macquarie Bank is willing to back €180m investment to help deliver more than 30 solar farms across the south and south-east of Ireland.
Speaking to the newspaper Mr Mullins said: “We’ve got the designs done, we’ve specific plans; we’re now supported by a bank, Macquarie Bank which is probably one of the largest infrastructure banks in the world.”
***Construction and property development group PJ Walls which hived off its profitable construction arm this week has recorded pre-tax losses of €67.9m in 2013.
New accounts show that the indebted PJ Walls Holdings (PJWH) recorded the losses after writing down the value of its assets by €67m.
Earlier this week, it was confirmed that PJWH has spun off its profitable building business, Walls Construction, from its holding company in a €10m-plus Management Buyout (MBO) deal partially backed by some of its shareholders.