Business Irish

Sunday 22 April 2018

Business pages: what it says in the papers

Gavin McLoughlin

Gavin McLoughlin

Here are the business stories you need to know about this morning:

Irish Independent

*IAG offered the Government a series of sweeteners around jobs, passengers and connectivity to try and clinch a takeover of Aer Lingus.

IAG boss Willie Walsh promised to create 635 net jobs, bring in an extra 2.5 million passengers and serve five new destinations in North America.

But the offer didn’t go far enough for the Government and Transport Minister Paschal Donohoe has recommended that the takeover bid is rejected, pending more assurances from IAG.

Separately, Aer Lingus signed  a deal to buy nine new Airbus aircraft that will enable it to replace its existing long-haul fleet.

*The longest-serving member of the European Central Bank’s board has been nominated to begin ‘informal talks’ with members of the Banking Inquiry.

The move follows pressure from the Government and inquiry members.

The ECB, one of the key players in bailout negotiations and the decision not to burn bondholders, has been resisting calls for its officials and formal officials to appear.

*Food company Kerry Group will spend at least €400m on acquisitions this year after shedding assets and repositioning its food division.

Chief executive Stan McCarthy said he would be disappointed if the company didn’t spend at least its free cash flow – around €400m – and the proceeds of selling its Australian bakery business Pjnnacle.

Yesterday Kerry said it’s in talks to sell Pinnacle, which analysts estimate could be worth around €40m.

*Mobile operator Digicel plans to raise $925m by selling bonds in a private placement, the company said yesterday.

The money will be used to repay borrowing of $800m due to be repaid in 2017, and for general business purposes, Digicel, which is owned by businessman Denis O’Brien, said.

Companies and countries around the world are using cheap credit from central banks that are keeping interest rates at record lows to repay expensive loans.

The Irish Times

*Government demands that IAG commit to the Aer Lingus slots at Heathrow for 10 years are becoming the main barrier to a takeover of the Irish airline.

Such a guarantee would be double the length of the five-year offer made by IAG boss Willie Walsh.

Though a deal appears possible, there are doubts over whether Mr Walsh will meet the coalition’s demands, as he told an Oireachtas Committee he wouldn’t increase his offer earlier this month.

*Managers at University College Cork have agreed to a €20.5m merger with the Irish Management Institute (IMI), documents seen by the newspaper show.

UCC would fund the deal with an AIB loan, repaying it off the back of a sale and lease agreement with the IMI.

The proposals will now be presented to UCC’s finance committee and governing body for approval.

The IMI, based in Sandyford in Dublin, has been providing executive education for six decades.

*Irish oil and gas explorer Petroceltic has outperformed its rivals in recent years, according to a report by shareholder advisory firm Glass Lewis seen by the newspaper.

The report rejects some complaints made by Petroceltic’s largest shareholder, Worldview Capital, which will try to oust the Irish company’s chief executive at an egm today.

But it also criticises the current Petroceltic board over what it says is a poor track record on drilling in recent years.

Irish Examiner

*Dalata, Ireland’s biggest hotels group, will create hundreds of new jobs over the next 12 months.

Chief executive Pat McCann said the exact figure will depend on the group’s performance.

The company is to a new hotel brand aimed at the corporate market within months.

*Nearly a quarter of hotels put in receivership at the end of 2014 haven’t come to market yet.

The ready supply, economic momentum and a large number of buyers in the market will probably see transactions reach record highs for the second year in a row, the paper says.

A partner with business advisors Crowe Horwath told the Irish Hotels Federation conference that Dalata and private equity firms like Blackstone are keen for more acquisitions, and have the firepower necessary to do deals.

Financial Times

*The US federal reserve is poised to raise US interest rates, Fed chairwoman Janet Yellen has indicated.

Ms Yellen told a Senate committee that the US labour market has improved, and that if the Fed changes its market guidance, interest rate moves could follow.

Us rates have been near zero since the financial crisis as part of efforts to stimulate the US economy. A raise would protect against the market overheating.

 

 

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