Monday 18 February 2019

O'Leary targets Asia investors as Gilmore woos China's Mr Big

Tanaiste holds talks with head of Chinese equivalent of the NPRF

O'Leary is heading to Asia in November
O'Leary is heading to Asia in November

John Mulligan and Colm Kelpie Beijing

RYANAIR'S Michael O'Leary says he'll visit Asia this year in a bid to expand the airline's investor base while the Government has invited China's top investment official to Ireland as it seeks new sources of overseas investment.

The news signals wider changes under way as Asia, and China in particular, move up the economic food chain from production sites to powerful investment centres in their own right.

Ryanair's chief executive said that he will travel to the region in early November following a trip by chief financial officer Howard Millar in June.

"We're conscious of the fact that, certainly in the future, a lot of the funding available will be emerging from the Asian markets," said Mr O'Leary.

"Remarkably, Ryanair is quite well known largely because every other airline in Asia is out there trying to persuade the investors that they're Asia's answer to Ryanair," he said.

One of Asia's most successful low-cost carriers – Malaysia-based AirAsia – was co-founded by former Ryanair director Conor McCarthy, who also owns aircraft maintenance firm Dublin Aerospace.

Singapore-based Tiger Air was backed by members of the Ryan family using their Irelandia Investments vehicle.

While Ryanair has a stock-market listing in the United States as well as Ireland, its shares on the other side of the Atlantic are very tightly held.

Selling Ryanair's growth story to investors in Asia would help to broaden its shareholder base.

Ryanair already leases some aircraft from Dublin-headquartered and Japanese-owned leasing giant SMBC Aviation Capital.

The airline has also said that it might consider securing a debt rating depending on how it decides to finance its record-breaking order for 175 aircraft from Boeing.

Conservative Asian investors favour top "AAA"-rated debt investments.

One reason Asian investors are looking further afield is poor returns at home. A slowdown in China has seen the Shanghai Composite share index slump by 43pc from its peak – wiping out more than half a trillion euros for investors. The same index doubled in the 10 months to the end of August 2009.

In Beijing, Tanaiste Eamon Gilmore met with China's Gao Xiqing, the chief investment officer of China Investment Corporation (CIC), and invited him to visit the country to study investment opportunities.

Mr Gilmore held a 30-minute meeting with Mr Gao at the Irish embassy in Beijing this week.

As chief investment officer at CIC, Gao Xiqing is responsible for investments made by the country's sovereign wealth fund – the equivalent of our National Pension Reserve Fund (NPRF). CIC controls more than €300bn of investments.

"I suggested to him that he might visit Ireland later in the year and have discussions directly both with members of the Government and the National Treasury Management Agency (NTMA) and the financial sector," Mr Gilmore told the Irish Independent.

The Strategic Investment Fund announced last month that it would see €6.4bn transferred out of the NPRF to be invested in commercially viable projects in Ireland.

The plan is to attract private sector and overseas money to invest alongside the State in specific projects.

The NTMA and CIC International, a subsidiary of China Investment Corporation, last year signed a memorandum of understanding to work together to explore investment opportunities.

Irish Independent

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