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What it says in the papers: business pages


HERE are the main business stories from this morning's papers:

Irish Independent:

***Patrick Honohan wants to burn Anglo Irish Bank junior bondholders and save the taxpayer up to €300m, the Irish Independent can reveal.

But the Government isn’t optimistic and is cautioning about the legal difficulties of a final attempt to recoup some of the almost €30bn injected into the toxic bank.

In one of his last acts before announcing his retirement, Professor Honohan urged the Government to fight the legal case. And he has advised the Coalition to go as far as hiring one of the world’s top debt lawyers, described as a “fairy godmother to finance ministers in distress”.

***Tesco has regained the title of Ireland’s biggest grocery retailer from SuperValu – but the glory is likely to be short-lived.

The latest figures from research group Kantar Worldpanel show that Tesco now controls 25.2pc of the multi-billion euro Irish grocery market. Supervalu, which is controlled by the Cork-based Musgrave group, has a 24.8pc share.

The data is for the 12-week period to May 24. The previous figures had Tesco and SuperValu neck-and-neck with 25pc each, but prior to that SuperValu had clinched the top spot. It had been the first time in over a decade that Tesco wasn’t Ireland’s biggest grocery retailer.

***Irish renewable energy company Mainstream Renewable Power expects construction to be completed on two large scale wind farms in South Africa by the end of 2017.

The wind farms, which will have a with a total generation capacity of 250 megawatts, represent an investment of about €420m.

Speaking to the Irish Independent, Mainstream CEO Eddie O’Connor said: “I think that financial close will be reached in the first quarter of next year and about a year after that construction should be completed.”

Irish Times:

***The Government has given ground on the terms of the upcoming IBRC inquiry and is likely to assess the role of the Department of Finance in transactions that resulted in losses of at least €10m, the Irish Times reports.

The oversight role that the Department of Finance played is also likely to be examined although the newspaper reports that it is unlikely to focus on individual relationships between senior figures.

However there will be no budging on the December deadline for the report as an October deadline for the inquiry, which will look into the way IBRC dealt with loans to up to 40 businessmen, including Denis O’Brien, appeared to be ruled out.

***A bank seeking to recover debts from bedridden businessman Tony O'Reilly wants to "humiliate and embarrass" him by requiring he swear a further statement as to his assets and liabilities, the Commercial Court heard.

Bernard Dunleavy SC, for Mr O'Reilly, said it was "a disreputable application" and should be rejected. However, Mr Justice Brian McGovern said he would require the 79-year-old, who recently underwent back surgery in New York, to swear a new affidavit by September 9 after the judge said there was nothing to stop him instructing lawyers and accountants to prepare the information.

The case arises out of AIB's efforts to recover monies owed to it by Mr O'Reilly following a €22.6m judgment entered against him last June in favour of the bank.  His total indebtedness to AIB now stands at around €15m.

***Opposition TDs are attempting to get four representatives from State-backed agencies removed from a new expert group on climate change, the Irish Times reports.

A new advisory council focused on helping the State cut its carbon emissions is being established by the Government. Of the ten seats on the council, four are to be filled with ex-officio members of State agencies  including the Environmental Protection Agency and Teagasc.

According to the Irish Times three Opposition TDs have tabled amendments to the Bill that will establish the council with the aim of removing the four ex-officio representatives.

Irish Examiner:

***Ireland needs to make an effort to make renting appear more attractive to both prospective renters and landlords to prevent another housing bubble, a deputy head at the Central Bank has said.

Speaking at a conference in Dubrovnik, Croatia deputy governor Stefan Gerlach said that the rental market could help bring stability to the housing market in countries such as Ireland and Croatia.

He encouraged looking at policies such as the strengthening of tenure by offering long term tenancy agreements and added that landlords may also require incentives.

***The MANDATE union is going to ballot its 4,000 members at Pennys on a 2pc pay increase in the coming weeks.

This follows the Labour Court recommending an increase higher than what was on offer from Penny’s owner, Primark and not connecting it to any revised pay-scale being agreed with new entrants.

In the dispute between the two sides, MANDATE was seeking a 3pc pay claim for 12 months retrospective to June 1st last year. However, management offered a 1.5pc pay rise contingent on a revised payscale being agreed for new entrant.

***Etihad will sell its 5pc stake in Aer Lingus to IAG as part of a €1.36bn takeover bid for the Irish carrier.

The chief executive of Abu Dhabi-based Etihad, James Hogan, confirmed the planned sale, which follows the Government’s decision to sell its 25.1pc Aer Lingus stake. Ryanair owns almost 30pc of the carrier.

Etihad has nearly doubled the value of its original investment in Aer Lingus. The Gulf carrier spent just over €35m between 2012 and 2014 for its 26.65m Aer Lingus shares. Selling to IAG at €2.50 per share will see Etihad receive over €66.6m for its 4.99pc stake. However, it also received a 5 cent per share dividend from Aer Lingus last month, for a total of €1.3m.

Online Editors