Pensino woes at Aer Lingus, Perlico founder back in business, PR man's tangle with INM
Moulton eyes ailing businesses for comeback plan
HAVING QUIT as head of Alchemy Partners last month, private equity veteran Jon Moulton is poised for a return.
Speaking to me in the Burlington Hotel in Dublin last night before giving a speech to the Irish Venture Capital Association, Moulton said he would next week launch a new enterprise that would specialise in corporate turnarounds.
He’s got a cracking name for the business, but I can’t print it yet for “compelling legal reasons”. It’s better than most.
Moulton wants to be operational before Christmas with a fund of about £100 million.
He founded Alchemy and was due to retire in October 2010 on turning 60. A row over strategy with his fellow partners hastened his exit.
“We were very good in turnarounds but my colleagues didn’t want to do turnarounds,” he says.
Moulton shouldn’t be short of deals. “There will be a lot,” he says. “How many over-leveraged, under-preforming businesses would you expect there are in Ireland? At a reasonable estimate, I’d say about 100. If I can land one or two of those, I’ll be happy.”
He expects a shake-out from the financial sector here to throw up opportunities.
Moulton takes a keen interest in Ireland. On Nama, he says there is “no good answer to this stuff. There are all kinds of ways of doing this.”
He holds to the view that taxes will have to be raised and spending cut and we should hope for the best to get our exchequer finances back in order.
He is no fan of Gordon Brown and believes Britain’s national debt is a ticking bomb that could explode in 2014. “I’m happy to take the bet that we’ll end up with the IMF in.”
Moulton put Brown’s face on his special edition Recession Red wine bottle, which has sold out. “We’ve had orders from around the world.”
Pension reform may end in court
AS CHRISTOPH Mueller continues his tour of Aer Lingus bases to discuss the restructuring plan, the airline's unions have withdrawn for now to consider their strategy.
We can expect a bitter battle to emerge over Aer Lingus's decision to effectively stop paying into its pension schemes - for general staff and pilots - and start a new fund. Unions will not take this one lying down. In essence, Aer Lingus wants to end its contributions to the schemes, one of which is shared with SR Technics and the Dublin Airport Authority (DAA) and has a €460 million hole in it.
While the scheme has technically operated in the past as a defined-benefit one, as per a Pensions Board determination, Aer Lingus believes that, legally, its status is that of a defined-contribution scheme. Therefore it doesn't feel it has an obligation to settle any deficit in the scheme.
Instead, Aer Lingus wants to introduce a new defined-contribution scheme, which would be related to the future service of all employees and would be cost-neutral for the company.
Workers in Aer Lingus, SRT and DAA, and the respective employers were each making a contribution of 6.375 per cent to the scheme. That has been the case since the mid 1970s.
Aer Lingus's IPO prospectus from 2006 gives some clarity on the matter. In the event of a default on the payment of "basic benefits" by the pension schemes in the future, the airline said it had "firm legal advice" that "any such claim if made would be unlikely to succeed".
It added, however, that the board was "aware of alternative legal advice provided to the ministers to the effect that, in the event of a default" a "reasonable case for a claim could be made" by current or former workers.
Aer Lingus made a one-off contribution of €104 million to a supplementary pension fund after the IPO to settle it dues.
Its latest move is no doubt being closely watched by DAA, which is negotiating its own restructuring plan with staff and is seeking to tackle the pension issue, too.
Likewise, there will be other State-owned and private companies watching with interest. Don't be surprised if the respective legal opinions offered in at the time of the IPO in 2006 end up being tested in the courts.
PR executive finds himself in hot water with INM
PUBLIC RELATIONS executive James Morrissey is once again in hot water with Independent News Media (INM) and its chief executive, Gavin O'Reilly.
Morrissey, who represents Denis O'Brien among others, is in INM's sights over his claim on Marian Finucane's RTÉ radio show in early September that O'Reilly taped a phone conversation he had in August with O'Brien and Paul Connolly.
O'Reilly has denied any recording took place, claiming that he took a contemporaneous note of the call, which he enclosed with a letter to O'Brien on August 28th.
Dublin-based law firm McCann FitzGerald claims its clients were defamed by this statement and is seeking an apology from Morrissey on behalf of INM and O'Reilly.
It wants the apology to be offered to all Irish print and broadcast media and has also sought a payment of €500 for Our Lady's Children's Hospital, Crumlin.
Morrissey denies making any defamatory statement and has once again turned to Belfast-based media lawyer Paul Tweed of Johnsons Solicitors to represent him.
This is not Morrissey's first spat with INM and the O'Reillys. In 2007, he was threatened with legal action over his role in circulating a report on corporate governance at INM to the media.
Tweed represented him on that occasion too and, more than two years on, the case has yet to be triggered.
The view was that INM and O'Reilly wouldn't want their dirty linen washed in public. It will be interesting to see if they change their tactics this time around.
Perlico founder quietly confident about new venture
A YEAR on from leaving Perlico after its sale to Vodafone, founder Iain MacDonald is back in business.
The young executive has emerged as a lead investor in Weedle.com, a "global social utility" that hopes to be "used worldwide by millions of people as part of their daily lives".
Based in Blackrock, Weedle was formed last year and has been quietly recruiting people for its "big idea". It already has about 15 staff.
Earlier this week, MacDonald told me Weedle was planning to launch in the second half of 2010.
He was suitably vague about its offering, except to say it was in the social networking space without being a replica of Facebook, Twitter or the like.
And it is leveraging the web 2.0 application. "We are applying it to something different," he said.
"That's why we have to keep it confidential until closer to launch. We think we have something a little special."
Weedle is also backed by Jim Mountjoy, the former Euristix chief.
MacDonald's father, Malcolm, who was a shareholder in Perlico, is also a director of Weedle.
MacDonald pocketed €12 million on selling his 20 per cent stake in Perlico. He exited just before the economic crash but is now back in the saddle.
"It's a bit of entrepreneurial optimism in a sea of negativity in the Irish economy at present," he said.
