Today in the pressWednesday 03 July 2013 09.39
COMPANIES MISS DEADLINE FOR SUBMITTING PLANS TO PLUG PENSION DEFICIT - Many companies with bust pension schemes are understood to have missed Sunday's deadline to submit plans to plug their deficits, says the Irish Independent. The Pensions Board opened its offices especially on Sunday afternoon in anticipation of a large surge in restructuring plans being submitted. A spokesman for the board would not say how many companies with holes in their defined benefit pension schemes had missed the deadline. He would only say a "significant" number of the broken company retirement schemes had met Sunday's deadline for outlining a plan to plug their deficits. Chief executive of the Irish Association of Pensions Funds, Jerry Moriarty, said there were 900 defined benefit schemes in the State. A defined benefit scheme is where employees are promised a set level of pension based on their years of service and their salary at retirement. But the fact that people are living much longer than they were when these schemes were designed means that the promises, for the most part, cannot be met.
ULSTER BANK WARNS OF ACTION AGAINST STRATEGIC DEFAULTERS - Ulster Bank is to continue to take action against households that are in a position to service their mortgages but who are not currently doing so. The bank said yesterday it had witnessed a substantial rise in the number of mortgage borrowers strategically defaulting, writes the Irish Times. It attributed the increase to a number of factors including the introduction of the mortgage code of conduct and the halting of repossessions following the discovery of a loophole by Justice Elizabeth Dunne in the 2009 Land and Conveyancing Reform Act. Speaking during a call with investors during which the bank outlined plans to reduce its number of branches, Ulster Bank’s chief risk officer Stephen Bell said about 35 per cent of mortgage borrowers in arrears are not currently paying anything. He said the bank had already taken steps to work with customers to find a solution to the issue and the number of borrowers defaulting had declined sharply as a result of this. Mr Bell warned the bank would consider further steps against those not currently servicing their mortgages, including legal action if necessary. He added that the bank’s aim was to work constructively with customers but noted that the average mortgage repayment per month is usually considerably less than the householder would pay in rent. During the investors’ call, chief executive Jim Brown outlined plans to shut as many as 40 branches as part of a new plan to become a “smaller, lower-cost and profitable bank”.
PROFITS AT DESMOND'S FESTIVAL FIRM RISE TO £20m - Ireland’s most successful concert promoter Denis Desmond has added to his fortune by sharing dividends totalling £9.58m (€11m) from his Festival Republic business over the past two years. The Electric Picnic is one of six outdoor festivals that Festival Republic will be promoting this year. New figures show Mr Desmond’s Gaiety Investments shared a further £2.93m in dividends last year from Festival Republic, and this followed a dividend payout of £6.6m in 2011, reports the Irish Examiner. Gaiety Investments has a 49.9% share in Festival Republic with concert promoters, Live Nation owning the remaining shares. The figures show almost 600,000 people went to see Festival Republic’s six events last year including the Reading and Leeds music festivals. The figures show the UK-based firm’s pre-tax profits in the 12 months to the end of Dec 2012 decreased by 19% from £6.25m to £5m. This followed revenues at the firm dipping marginally from £42.2m to £41.4m. In an interview yesterday, Mr Desmond said he is “very happy” with how the Festival Republic business performed last year.
GUY HANDS PULLS GERMAN PROPERTY FLOAT - Guy Hands, the British private equity financier, has abandoned the flotation of Germany’s largest residential landlord over concerns that the recent rally in European equities has run its course, says the Financial Times. Deutsche Annington, the 180,000-unit property portfolio owned by Mr Hands’ Terra Firma, had been due to list in Frankfurt on Wednesday. In a brief statement on Tuesday night, however, the company said it was pulling the offering due to “persistent adverse market conditions”. The decision to cancel the IPO, which was expected to raise about €1bn and value the landlord at €11bn including debt, will be a blow to Mr Hands, who has long sought an exit from the company he built up during the property boom. Mr Hands is seeking to return cash to investors before Terra Firma starts raising a new fund. Like other financiers and fund managers, Mr Hands fears the uncertainty over quantitative easing has brought the rally in European stocks to an end.