Whiterwater complex in the black; Denis O'Brien welcomes Carlos Slim; Dermot Mannion's good mood may not las; FBD investors scratching their heads; Sky Ireland talks to Setanta.
Slim pickings on the menu for O'Brien
ON TUESDAY, Denis O'Brien welcomed the emergence of Mexican moneybags Carlos Slim on the share register of Independent News Media.
"I hope Carlos Slim will support the move for change at Independent News Media and an improvement in corporate governance," O'Brien told The Irish Times.
We doubt the bonhomie lasted 24 hours after the pair were named on Wednesday as mobile phone licence winners and, therefore, future rivals in Panama.
Slim is the biggest mobile operator in Latin America and, with two companies already in situ in Panama, O'Brien will have his work cut out getting a return on the $86 million (€56 million) he has reportedly paid for the licence.
Digicel is having a busy month. On Tuesday, it launched its mobile service in the Pacific island of Tonga at a cost of $20 million.
On May 1st, meanwhile, Digicel lodged an application with the International Finance Corporation (IFC), an arm of the World Bank, seeking an investment of $50 million to $75 million to help fund the introduction of mobile services in Honduras, where O'Brien secured a licence last year.
According to the proposal lodged with the IFC, Digicel is planning to invest $400 million in Honduras to provide GSM services to both rural and urban parts of the country.
O'Brien has "conservatively" estimated that Digicel's entry to the market in Honduras will push mobile penetration up to 75 per cent by 2011 and help boost business development in that country.
"By supporting the project, IFC will provide long-term financing in a priority country in which private financing from local or from international commercial banks without multilateral support is scarce," Digicel's proposal states.
Is that a signal that cash-hungry Digicel is feeling
the effects of the global credit crunch? It can hardly be immune to the scarcity of funding at present.
O'Brien won't have long to wait for an answer from the IFC; its board is due to meet on June 3rd.
Whitewater centre squeaks into the black
ACCOUNTS JUST filed for the Whitewater shopping centre in Newbridge, Co Kildare, show that its management company made a small profit of €3,478 in its first year of operation.
White Water Management Ltd earned turnover of €3.02 million in the year to the end of March 2007. Its administrative expenses were €2,500 above that level.
Other operating income of just under €6,000 meant the company (controlled by property developer Seán Mulryan) and clients of White Water Property Nominees (controlled by Kevin Warren) nudged into the black.
No details of its income are listed but its schedule of expenses shows that it spent a hefty €740,031 on security while its cleaning bill was €543,874.
It spent a festive €82,615 on Christmas decorations and €333,852 on advertising and promotions.
Whitewater opened in April 2006 and is one of the biggest shopping centres outside Dublin.
It was the subject of a protracted legal battle starting in 2006 between Warren and developer Seán Dunne, who sold his half share in the €400 million complex.
Dunne had agreed to sell his stake to Warren for an up-front payment of €197 million and an additional fee of €27 million.
According to the accounts, Dunne was given the use of a "management suite" at Whitewater following the sale of his stake in the business in July 2006 for an annual rent of €150,200.
The accounts indicate that this charge was waived by its owners in the year in question.
While the centre is said to be trading well, plans to add an eight- screen cinema have met with resistance from locals. Newbridge was recently named as the town with Ireland's highest unemployment rate.
With credit as scarce as a rainy day in the Sahara, cash is king right now.
Dunne must be happy to have banked his cut of the takings from Whitewater.
Can Mannion stay on at the smile-high club?
A GRINNING Dermot Mannion appears on six of the first 20 pages of Aer Lingus's 2007 annual report.
He had much to smile about last year given that he saw off Ryanair's cheeky bid, launched a new base in Belfast and booked a 13.5 per cent rise in his pay package, which amounted to a tidy €1.115 million.
Siptu might be about to darken his mood. Incensed by the pay increases for Mannion and his colleagues, it is threatening industrial action if the airline continues to withhold pay rises due to its members since last October under the national wage deal.
Aer Lingus has withheld the money until agreement is reached on cost cuts under its PCI-07 programme.
The airline thought it had struck a deal last month but, under Siptu's arcane balloting, all sections of ground staff needed to vote in favour of the deal. So while a majority of members backed the agreement, it fell because not all sections of the airline's members gave it the green light.
Siptu is the last union to agree a deal with Aer Lingus on PCI-07.
Siptu branch organiser Teresa Hannick said yesterday: "The management wants our members to embrace widespread change that severely disrupts their family lives in order to generate savings, while non-executive board directors are having their standard fees increased from €17,500 a year to €45,000 just to attend meetings."
It's fighting talk. The problem for Siptu, however, is that it's running out of runway. Its officials agreed to a cost-saving deal that a minority of members shot down - not exactly a position of strength.
It's now a high-stakes game of chicken. If Aer Lingus's board can force the union to blink first, Mannion will keep smiling.
Two sides to FBD story
INVESTORS IN FBD must have been left scratching their heads on Tuesday after Goldman Sachs reinstated its coverage of the Irish insurer, placing a "sell" recommendation on the stock with a three-month price target of €26 a share.
Goldman Sachs, you might remember, was one of FBD's key advisers in its April 29th decision to reject a €36-a-share approach from Eureko, which the insurer described as being "entirely without merit".
Less than a fortnight later and the research side of the London- based financial group's house has advised clients to dump the stock.
"We reiterate our view that despite FBD's attraction as a target," Goldman Sachs said, "given its exposure to the high-growth Irish market and its easily-digestible market cap, the likelihood of a successful takeover is impaired by the full current valuation; the outlook of declining underwriting returns in Ireland; and the existing presence of the major pan-European players in the Irish market who could grow organically."
Clearly, this wasn't a view shared by Eureko.
To be fair, Goldman's analysts had FBD listed as a "sell" before Eureko tabled its €1.2 billion offer.
If nothing else, the episode shows that Chinese walls do actually exist.
Sky's the limit for OneVision
THEY MIGHT be bitter rivals for live sports rights but that hasn't stopped Sky Ireland from holding talks with the Setanta Sports-backed OneVision consortium about carriage on its digital terrestrial television (DTT) multiplexes.
Chaired by Fintan Drury, OneVision is one of three bidders for the DTT licences, the others being EasyTV (backed by RTÉ and Liberty Global) and the Denis O'Brien-backed Boxer consortium.
A spokesman for OneVision told us that it hopes to carry three of Sky's sports stations and three of its movie channels as part of separate, add-on premium packs that will be available to subscribers.
This will be in addition to a premium pack of Setanta's own sports channels.
"We've had positive meetings with them [Sky] and are hopeful of having them on the platform," he said. "Setanta is a rival of Sky Sports but, to be honest, sports fans just want to watch sport, whichever channel shows it."
OneVision proposes to carry 38 stations across the three DTT multiplexes. Its basic pack will cost €9.99 a month and is likely to include all the British terrestrial channels, Setanta Sports Ireland, Channel 6, two new stations from TV3 and a community channel.
If OneVision doesn't net the top prize, it is understood that Setanta hopes to score a consolation.
"We'd certainly enter into talks with them [the winning consortium]," a source close to Setanta said. "There's demand for our stations and we'd like to make that as widely available as possible. But fingers crossed, OneVision will win the licence."
