Spotlight on Arc irks others; Nagle aims high; Irish mine goes on the market

Zapa set for new funding round

THESE ARE busy times for Zapa Technology founder John Nagle. Having raised €2.5 million from Delta Partners, the Corkman is set to kick off a new funding round, which he hopes will be concluded by Christmas.

"When and how [the funding will be done], I don't know yet," Nagle told me earlier this week. But it will be some millions of euro.

Zapa is deploying so-called near-field communications (NFC) to allow consumers to use their mobile phones to buy goods, use store loyalty cards and receive discount vouchers, among other things.

Nagle, who was deposed as boss of Payzone last year, hopes to use first-mover advantage to help Zapa become a dominant player in Ireland and abroad in this new technology.

"Delta has been hugely supportive, they understand the NFC environment . . . they really believe it's all to play for," Nagle says.

NFC is in its infancy and won't become ubiquitous on mobile phones for a couple of years yet. In the meantime, Zapa has developed a tag that can be attached to a mobile and will mimic the technology.

He's signed a deal with coffee chain Insomnia, allowing consumers to earn loyalty points for each transaction. This requires tag readers to be placed in shops.

"The biggest barrier is the capital cost of rolling out the infrastructure. In Ireland, it's likely to require an investment of €3 million to €5 million on the retail side alone."

Nagle has also agreed deals in Dublin and Antwerp to launch city-centre gift cards in time for Christmas, backed by Mastercard. "There's another three cities lined up for after Christmas," he told me.

And he's working on community-based gift card schemes in towns across Ireland, which will encourage people to shop locally and use facilities on their doorsteps.

Tuam, Bray and Dundalk are in the pipeline. "We hope to have 50 towns live in Ireland in the next two years," he says. "The idea is that all of the retailers come together and offer a compelling reason why the people of the town should shop there and not drive to a city or shopping centre."

So how big can Zapa become? "If we survive the initial start-up challenges, we can be into the hundreds of millions in revenues."



Sale of Lisheen lead and zinc mine part of saving plan

MINING GIANT Anglo American yesterday announced plans to sell the Lisheen lead and zinc mine in Co Tipperary as part of a divestment programme of non-core assets aimed at saving $120 million (€80 million) a year.

Anglo's decision to sell off certain assets comes hot on the heels of Xstrata's decision not to pursue a proposed nil-premium merger following a public rebuff by its mining rival.

It might also explain why the company took a $170 million dividend out of Lisheen Milling Ltd on December 16th last.

This emerged in accounts just filed for the Irish company.

Lisheen Milling made a loss in 2008 of just under €1.5 million as its turnover almost halved following the collapse of global zinc prices due to the credit crunch and recession.

Lisheen Milling closed the year with shareholder funds of $27 million, down from $199 million in 2007.

After a slow start, Lisheen had been something of a cash cow for Anglo American during the global economic boom of earlier this decade.

Then demand for zinc had soared, thanks primarily to the boom in China.

Prices collapsed in 2008, which was particularly problematic for Lisheen given its high cost base.

Anglo American's decision to sell Lisheen comes in the wake of persistent rumours this year that the mining giant was planning to wind down its operation in Tipperary.

It has set aside $35.5 million in the accounts of Lisheen Milling as a provision for "closure and related costs".

These are expected to be incurred in 2014, at the end of the mine's estimated life.

With Lundin Mining planning its exit from Galmoy in Kilkenny and Boliden threatening the closure of the Tara mine in Navan, it remains to be seen whether Lisheen will attract any suitors.


Unease over blaze of publicity at launch of Arc

MARK DUFFY has never been one to shun the limelight, but most banking executives were puzzled by his decision to go public with the launch of Asset Resolution Corporation (Arc) in Dublin on Tuesday.

Arc aims to buy distressed property loans from foreign banks operating here at a knockdown price. These include Ulster Bank, ACCBank and Duffy's former employer, Bank of Scotland (Ireland).

A large number of private vulture funds have already been circling banks in Ireland seeking to pick at the carcass that is the Irish property debt sector.

Almost all have avoided attracting any publicity, never mind the display shown at Arc's launch.

This has generated some unease.

Several of the financial institutions have privately signalled that they would rather work through their problem loans on their own with help from their overseas parents.

A figure of €3 billion has emerged as the size of the war chest that Arc is amassing to bankroll the venture, although Duffy refused to be drawn on this.

Three UK institutional investors – long-holding pension and fund management companies – are believed to be interested in backing Arc.

One bank executive questioned whether the blaze of publicity, which attracted about a dozen reporters, was an attempt either to generate further financial support or procure the cash promised in the expressions of interest already received.

Another suggested that a launch of the company would have been more appropriate after Arc had concluded a deal for a portfolio of troublesome property loans.

Regardless, Duffy and Kevin Warren have flown their kite. There are several more up there – we just haven't seen them yet.

Little Things

-Tesco made a profit of £1.4 billion (€1.54 billion) in the six months to the end of August 2009 but, in spite of this stellar performance, the supermarket giant has decided not to give its Irish pensioners a pay rise this year.

Tesco’s Irish pensioners received a letter this summer informing them that it would not award the “discretionary” pension increase that was due on July 1st.

“Over the last year, the cost of living has reduced,” the letter from the pension administrator, Watson Wyatt, said. “In these circumstances, the board [of Tesco Ireland Ltd] concluded that keeping payments at their current levels was the appropriate course of action.”

Tesco Ireland scrapped the free bar at last year’s Christmas bash for pensioners. It gives a new twist to its marketing slogan: “Every Little Helps.”

-Eircom has begun the search for an external public relations firm. The telco has hired consultant Brian Sparks to help it with the process. I'm told Sparks this week began sounding out potential interested parties.

The move comes as talks on the sale of the business to Singapore-based STT Communications Ltd continue.

STT representatives are believed to have been in town this week to meet Eircom senior management and the regulator.

The deal is expected to close around the turn of the year.

In the meantime, Eircom’s new chief executive, Paul Donovan, has initiated a “culture audit” within the company, the results of which should make for interesting reading.

-Having stood (unofficially) in the 2007 general election, Mr Tayto has penned a book of his life, entitled The Man Inside the Jacket. It's the latest marketing ploy by owner Ray Coyle to push the Tayto brand.

A crisp hardback edition will set you back €5.99, with a contribution going to the charity Aware.

-The beauty business owned by Celia Larkin (left), who formerly stepped out with ex-taoiseach Bertie Ahern, had a tough 2008.

Accounts just filed for Beauty at Blue Door Ltd indicated it made a loss of just more than €10,000 last year. Its accumulated losses totalled €66,428 at the end of December 2008.