Today in the press

Wednesday 25 June 2014 14.40
A look at some of today's business stories in the newspapers
A look at some of today's business stories in the newspapers

FUND BACKING McKILLEN AND RONAN PLANS TO INVEST €25m - Development Securities plc, the British listed fund backing Johnny Ronan, plans to invest up £20 million (about €25 million) in equity into Irish property deals, according to an investor presentation. “Ireland presents considerable investment and development opportunities for us - a market in which we see strengthening demand and opportunities to apply our strategy of creating value through regeneration,” it told investors in April. “Maximum equity exposure in this market is to be restricted to circa £20m,” it added. Property funds usually use a combination of debt and equity allowing them to invest a multiple of the underlying equity, writes The Irish Times. Dev Sec confirmed it was part of a consortium - including developers Paddy McKillen and Johnny Ronan, as well as Colony Capital, a €20 billion American investment fund - that has bought a development site on Burlington Road, in Dublin 4, for €40.5 million. The site has planning permission for the development of a 15,400sq m (166,000 sq ft) grade A office building expected to require €50 million to develop. The UK company said it expected in the near-term to market the five-storey building for prelets, before beginning construction within six months with an anticipated completion date of mid- to late 2016.

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STATE WILL RAISE €500m THIS YEAR FROM ASSET SALES - EU - The Government could take in up to €500m this year from the programme to sell state assets including parts of the ESB and Bord Gais, according to the European Commission. That compares to €110m that was built into the Budget, the Brussels-based body said, says the Irish Independent. But in its first post-bailout progress report, the Commission said it has been given no guidance to date on how much of the cash will be used to pay off debt, despite an agreement by the Government to split the cash with lenders. "There has been no indication what proceeds from the sale of state assets would be used for debt reduction, a commitment under the former EU-IMF programme," the report said. Bord Gais's energy division and parts of the ESB are among the so-called "family silver" state assets put up for sale as part of the deal with the troika. Under a deal struck with the current Government, half of the money raised was to be ploughed back into the economy through investment in job creation programmes while the balance would be used to pay down debt. In fact, the original proposal was that all of the money raised would be used to reduce the national debt.

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COILLTE, BORD NA MÓNA PART MERGE - Commercial semi-state forestry company Coillte is to partially merge with Bord na Móna, it was announced yesterday. Following a review by state agency NewERA, it has been decided that a partial merger of the two commercial semi state bodies would be of benefit to the State and the two companies in the medium term. The merger will focus on areas of overlap, including biomass, wind energy and tourism, says the Irish Examiner. Agriculture Minister Simon Coveney said the decision was the result of extensive research by NewERA. "A joint venture between the two companies will manage their common business activities in biomass, wind energy, shared services, and recreation and tourism. The decision will maximise the levels of benefit to the State and the two companies in the medium term," the minister said. "This decision is the culmination of an in-depth analysis undertaken by NewERA, and the relevant departments on behalf of the Government and it also included input from both companies," he added. The decision came after Energy and Natural Resources Minister Pat Rabbitte secured Cabinet approval for the proposal jointly put forward by Public Expenditure Minister Brendan Howlin and Mr Coveney. 

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MPs ACCUSE CARNEY OF CONFUSING SIGNALS OVER INTEREST RATES - The Financial Time says that British MPs have accused Mark Carney, the Bank of England governor, of sending out confusing signals over the timing of interest rate rises, with one likening him to an “unreliable boyfriend” for the way he was communicating his position. Andrew Tyrie, the influential Tory MP who chairs the Treasury committee, said that since Mr Carney became governor he had seen “quite a lot of guidance, not all of it seeming to point in the same direction”. Pat McFadden, a Labour member of the committee, said the BoE was behaving like an “unreliable boyfriend” in the way it was giving guidance on interest rates. “One day hot, one day cold, and the people on the other side of the message don’t know where they stand.” In a tense exchange with MPs on Tuesday, Mr Carney appeared to play down the chances of an increase later this year - just a week after he used a speech at Mansion House to warn rates could rise “sooner than markets currently expect”. Mr Carney on Tuesday emphasised that despite a strengthening recovery, wage growth remained slow, meaning the economy might continue to grow without generating ­inflation

Keywords: presswatch