Today in the press

Wednesday 07 May 2014 11.22
A look at some of today's business stories in the newspapers
A look at some of today's business stories in the newspapers

NOONAN DISMISSES CONCERNS OVER IRISH SME DEBT - Minister for Finance Michael Noonan has dismissed concerns about the level of SME debt carried by Irish businesses, amid concern in Brussels over the issue. It is understood that the high levels of property-related debt incurred by Irish businesses was discussed during last week’s first post-bailout visit by troika inspectors to Dublin, writes the Irish Times. “The SMEs are being sorted out. Bank of Ireland say they have over 90% of the SME debt restructured and AIB claim they have 65% restructured so, as far as we’re addressing the legacy imbalances from the recession, the SMEs would be far down the list,” Mr Noonan said yesterday in Brussels. Irish SMEs held about €56 billion of debt on their books at the end of last year, according to the Central Bank. It is understood the issue of Ireland’s legacy debt, including the high level of SME indebtedness, was discussed by euro zone finance ministers on Monday night, when Ireland was one of five euro zone countries whose macroeconomic imbalances were discussed at the euro group meeting in Brussels. The European Commission’s spring economic forecast, published on Monday, also highlighted the matter. In an analysis notable for the absence of any reference to mortgage arrears, the forecast noted “the effect of legacy debts” and impaired access to finance “continue to pose risks for SMEs”.

***
SHANNON CRUISE RIVALS TEAM UP TO LURE GERMAN TOURISTS - Two of the River Shannon's biggest boat hire companies have joined forces in an effort to lure more river-loving German tourists. Carrickcraft and Waveline, Shannon-based rental companies which hire out cruisers to families, stag parties and other tourists, are to merge next year, says the Irish Independent. The new entity will be the largest of its type in the country, with 125 cruisers. It will retain the two separate brands but trade under the name, Cruise Ireland. The group is targeting combined sales of €2.2m in 2015. Boating holidays on the River Shannon are uniquely popular among Germans, a result of a marketing campaign spearheaded by Bord Failte in the 1960s and the efforts of German travel company Dertour, which promoted these holidays heavily. About two-thirds of all of Carrickcraft's 5,400 passengers last year came from German-speaking countries while most of Waveline's 1,298 passengers were also of German origin. The industry was badly hit by the recession - competitor Emerald Star closed its Belturbet, Co Cavan, base in 2013 - but is bouncing back as eurozone consumer spending and tourism recovers.

***
SHARES AT IRISH EXPLORER TUMBLE 50% - Shares in Irish explorer Fastnet Oil & Gas tumbled by 50% yesterday on the back of its maiden drilling round finding no commercial hydrocarbons. Fastnet has a share in two Moroccan licences being operated by US firm Kosmos Energy and the next drilling in the area isn’t expected to get under way until late 2014/early 2015, writes the Irish Examiner. The FA-1 well in the highly anticipated Foum Assaka offshore licence was drilled to a total depth of 3,830m but plugged and abandoned after failing to encounter commercial hydrocarbons. The work did encounter elements of oil and gas, suggesting some presence of a working petroleum system. The Dublin firm’s managing director, Paul Griffiths, attempted to inject some positivity by noting that drilling was completed within budget and provided “valuable information” supporting the ongoing evaluation of the licence. “Fastnet is pleased that its strategy of funding high risk/high reward drilling, offshore Morocco, by means of its previously announced farmout, allows the company to fully participate in the further evaluation of the prospective areas of the licence,” he said. Fastnet’s share price closed down 50% in Dublin yesterday, falling from 16c to a fresh annual low of 8c, while also shedding nearly 44% in London. However, the company’s management said it remained upbeat on the prospects for some recovery in the stock’s performance. 

***
TWITTER SHARES TUMBLE AS LOCK-UP ON INSIDE SELL-OFFS EXPIRES - Twitter shares tumbled nearly 18% on Tuesday after the end of restrictions on insider sales following its initial public offering last November. The stock closed $6.90 lower at $31.85 in high volume trading, marking a fresh low since Twitter went public six months ago, says the Financial Times. The messaging platform has lost more than half its value since it peaked at $73.31 in December, although it still trades above its $26 IPO price. The drop came despite several Twitter investors, including co-founders Evan Williams and Jack Dorsey as well as institutional backers and venture firms, promising last month that they would not sell on the lock-up’s expiry. Since then, Twitter worried Wall Street with a quarterly earnings report last week that beat expectations for revenues but left investors looking for more growth in usage of the 140-character messaging site. About 480m shares became eligible for sale on Tuesday, of which the owners of more than 200m - including Rizvi Traverse, Twitter’s largest shareholder, as well as Lowercase Capital, Benchmark, IVP and JPMorgan - have promised not to sell. However, that still means more than three times as many shares could hit the market as were sold at the time of the IPO.