Monday 20 November 2017

Business Confidential

By 'The Insider'

Rory McIlroy is one of the 150 or so backers of the Park Regis Birmingham Llp
Rory McIlroy is one of the 150 or so backers of the Park Regis Birmingham Llp

Rory McIlroy knocks it straight down the middle and holes out on hotel deal

Golfer Rory McIlroy has holed out spectacularly with a Birmingham hotel construction scheme. McIlroy is one of the 150 or so backers of the Park Regis Birmingham Llp, along with Ireland goalkeeper Kieron Westwood, golfer Graeme McDowell, British Olympic legend Sir Steve Redgrave and tennis player Thomas Berdytch.

Investors borrowed €34.8m from specialist finance house Staywell hospitality management and stumped up another €22m to pay developer Seven Capital to build the hotel. The final blobs of paint are being added and the hotel is set to open in about two weeks. It'll be the first Park Regis hotel in the UK.

McIlroy and his fellow investors look to have done savagely well out of the deal, with the hotel now carried at €63m according to the latest instalment of the partnership's books. There's also an extremely tasty tax break on the inner city regeneration project, which shields McIlroy's initial investment as well as the profits from the scheme.

While McIlroy may have slipped from the number one slot in the world rankings, his eye for a deal remains unaffected.

KBC Ireland should buy out FBD for €300m while the going remains good

Belgian-owned KBC Bank Ireland announced its return to profit last week. Not surprising really, given that it now has some of the meanest interest rates for savers and some of the highest rates for borrowers.

The return to profitability has triggered a strategic review at the bank, which could see its Belgian top brass decide to sell it or try to concentrate on building up a more profitable Irish business.

Despite the recovery, Irish banks aren't exactly truffles for investors. Permanent TSB, which floated last year, is a dog, with shares down 40pc this year. Bank of Ireland has also been spanked.

Despite the improvement in arrears, the banks still have underpants destroying levels of bad debt on their books and the hundreds of thousands of loss making tracker mortgages are going nowhere fast.

Fortunately, the Government moved too slowly and wasn't able to press the trigger on an AIB flotation - which would have been election kryptonite, as shares would have been walloped.

But, despite the negatives over the banking sector, KBC has an opportunity here. It could bludgeon its way into the insurance market and buy the struggling FBD.

FBD chief executive Fiona Muldoon has done a lot of the hard work and has kitchen-sinked the insurer since taking control last year. The €70m convertible bond deal with Fairfax has filled a hole in its reserves. The ability to cross sell insurance products through its retail banking and digital banking platforms would make FBD a smart fit for KBC.

Even with a 30pc bid premium, FBD would be available for close to €300m.

Former banker Goggin teams up with Smurfit's Curley in lending move

Former Bank of Ireland boss Brian Goggin - the guy who was at the controls before the bank needed bailing out by the taxpayer - has joined up with recently departed Smurfit Kappa number two Ian Curley to lend some money.

Curley, who helped Gary McGann more than treble the size of Smurfit, stepped down as finance chief before Christmas.

The pair have just joined the board of MidCap Financial, a specialist lender managed by private equity behemoth Apollo.

Midcap "provides revolving and term debt facilities to middle market companies in North America and Europe. The debt facilities are primarily senior, but from time to time MidCap Financial provides subordinate capital to its target markets," according to the blurb.

The Irish board is now full of serious heavy hitters including Mark Cutis, who directs buying and selling assets for Abu Dhabi's Investment Council and former Citigroup banker Chat Leat, who master minded some of the biggest and most debt loaded buyouts of the boom.

Citigroup underwrote loans for bumper-deals such as KKR's $26bn acquisition of payments processor First Data Corp and the $46bn takeover of Texas power company Energy Future Holdings. Leat lives in the same Manhattan apartment block as Calvin Klein and his neighbours have included Jim Carrey, Nicole Kidman, Hugh Jackman, Martha Stewart, Gallo and Paul McCartney's ex Heather Mills.

Are Fine Gael and Labour ready to stuff the Quango boards yet again?

Last time around, it took just 34 days for the Fine Gael-led government to give a party loyalist a peachy quango role. Now, as the Government prepares to leave office, some lucrative jobs are being filled at some of the bigger state agencies.

Inland Fisheries Ireland (IFI) sounds terribly twee - but angling chips in €555m to the economy in direct spending, and then there's another €200m indirectly.

IFI board members earned between €6,000 to €9,700 serving the full year, according to its most recent annual report (which dates all the way back to 2012). the angling quango falls under Labour Minister Alex White's Department of Communications and Natural resources.

In recent weeks, serial Labour party election candidate Seamus Rodgers was re-appointed to the board. The Donegal former trade unionist is a local activist and has unsuccessfully contested 20 elections including 12 Dail contests.

Westmeath FG councillor and auctioneer Andrew Duncan was also appointed to the board. He has fished for Ireland.

Bord na gCon also got some new blood and legal expertise. It's not one of the more useless quangos, as the greyhound industry provides about €500m to the Irish economy and employs over 10,000 people directly and indirectly.

Cork solicitor Frank Nyhan was given a three year spot on the board, which runs to December 2018. Outside of his love for greyhounds, Nyhan is from a well-known Fine Gael family. But then Fine Gael has always been strong on family.

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