Today in the press

Wednesday 08 May 2013 09.12
A look at some of today's business stories in the newspapers
A look at some of today's business stories in the newspapers

DOYLE COLLECTION HOTEL GROUP REFINANCES ITS DEBT WITH AIB OUT TO 2017 - The Irish-owned Doyle Collection hotel chain has refinanced its €300 million-plus loans with AIB in what is thought to be one of the biggest refinancings of corporate debt here for some years. The Irish Times has learned that the Doyle group agreed a deal with the State-controlled bank in March. The debt was due to be repaid in November of this year but the company has now extended this out to 2017. It is not clear how much debt Doyle hotels has refinanced with AIB. Its gross debt stood at €331.2 million at the end of 2011. When cash is stripped out, the net debt was €303 million. However, in recent months, the group has sold three of its hotels in the US for a combined $149.5 million. It is not clear is any of these funds were used to repay debt to AIB. Separately, latest accounts for Doyle Hotels (Holdings) Ltd show that it increased its turnover by 11% in 2011 and returned to operating profit that year. The accounts show that turnover rose to €111.4 million in 2011, up from €103.3 in the previous year. Doyle Hotels posted an operating profit of €8.7 million in the year compared with a loss of €13.7 million in 2010. Its earnings before interest, tax, depreciation, amortisation and non-recurring items rose 23% to €26.9 million.

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MORE CREDIT UNIONS TO CLOSE AS BRANCHES CONSIDER MERGERS - The closure of further credit union branches looks increasingly likely after senior industry experts said all of Ireland's 400 credit unions should consider the possibility of restructuring, writes the Irish Independent. Restructuring was the main topic at a conference on transforming the sector, hosted by credit union insurance company CUNA Mutual, which insures the assets of 40 of the country's biggest credit unions. Mergers rather than outright closures were discussed, but a merger of two credit unions usually means that the premises of one is shut down. Though very few have occurred so far, the experts said further mergers are likely in the second half of this year. Mergers expert Tim Scanlon said credit unions need to be dispassionate and "take a long hard look at themselves" to assess their financial viability. The lawyer said that merging credit union branches released more money to invest in new products and technologies as well as a bigger customer base to tap into. "There's always a bias towards hanging in there, hoping things will get better, but we know from credit unions in other countries that this just does not work. Credit unions need to be wary of being overly optimistic," said Alan Ahearne, a former adviser to the late Brian Lenihan.

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PROXY FIRM GLASS LEWIS CALLS ON JAMIE DIMON TO DROP CHAIRMAN ROLE - Jamie Dimon’s future as chairman of JPMorgan Chase suffered a setback when a second shareholder advisory group recommended he be stripped of the role, reports the Financial Times. Ahead of a crucial annual meeting in Tampa in two weeks, shareholders faced a barrage of calls from both the bank and corporate governance groups soliciting their support in votes, with some of the largest investors backing the company’s board. Damaged by the fallout from the “London whale” affair, in which JPMorgan traders lost $6 billion betting on credit derivatives, Mr Dimon could lose one of his roles as chairman or chief executive, which he has held since December 2006. Other directors risk losing their positions altogether. On Tuesday Glass Lewis followed ISS, both shareholder advisory firms, in calling for investors to vote in favour of splitting the roles of chairman and chief executive. Defeat for Mr Dimon would be an embarrassing personal blow. The advisory group also recommended that shareholders vote against the re-election of James Bell, Crandall Bowles, David Cote, James Crown, Ellen Futter and Laban Jackson, citing a variety of deficiencies.

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G4S FEELS FRESH PAIN AS THE DUTCH THROW FEWER INTO JAIL - Politicians in Britain may be battling with the problem of overcrowded jails, but a lack of prisoners in Holland prompted G4S, the security giant that employs guards in the country's jails, to issue a warning over profit margins, says the London Independent. The Netherlands' prison population fell from 14,100 in 2005 to 11,000 in 2009, and is expected to drop below 9000 by 2015. As a result, the country is planning to close 30 jails, one of the reasons that forced G4S to admit its profit margins will be lower than expected this year. A shocked City sent the shares in the world's biggest security firm down nearly 15%. "The proposed closure of 30 prisons and other cost reductions by the Netherlands Ministry of Justice will have a significant negative impact on the group's Dutch business," G4S said. "Despite ongoing business improvement plans, the first-quarter margin trends are expected to continue for the full year." The FTSE 100 company, which failed to provide enough security guards for last year's Olympics, said its 0.6% decline in group margin in the first three months of this year could also be blamed on "continued challenging economic and trading conditions in continental Europe".

Keywords: presswatch