Today in the pressFriday 05 September 2014 09.25
ECB RESISTS IRISH PLAN TO REPAY IMF BAILOUT LOANS EARLY - Ireland’s plan to repay its IMF loans early is facing resistance from the European Central Bank amid continuing concerns that last year’s promissory note deal was bordering on monetary financing, says the Irish Times. In a setback to the Government’s bid to secure political agreement for the early repayment of the IMF portion of the bailout, ECB chief Mario Draghi indicated yesterday that concerns remained about the promissory note deal. Asked about his views on Ireland’s bid to repay the IMF portion of its bailout loans following the ECB governing council meeting in Frankfurt yesterday, he said that the bank “took note” of the plan adding that the bank will monitor “very, very closely what is being done with the sale of assets so that we call monetary financing concerns are being properly and significantly addressed”. Mr Draghi was referring to the Irish Central Bank’s obligation to offload the bonds it swapped for the Anglo Irish promissory notes as part in February last year. The deal is estimated to have saved the country up to €20 billion in borrowing costs. ECB sources confirmed that there is significant dissatisfaction in Frankfurt that Ireland has not proceeded quickly enough with the sale of the long-term bonds. “The point is, if Ireland is in a position to repay the IMF loans early, it should also be in a position to sell the bonds,” an ECB source said, adding that the central Bank had only sold a “fraction” of the bonds.
FROSTY RECEPTION FOR NTR BOARD AS SHAREHOLDERS VENT FRUSTRATION - The board of renewable energy investor NTR received a hostile reception from some shareholders yesterday amid anger at the company's strategy and allegations about corporate governance, says the Irish Independent. Two of the company's significant shareholders made statements at NTR's annual general meeting, citing concerns about conflicts of interest involving the board, remuneration and objections about the company's plans for a new European wind strategy. Concerns were also raised by shareholder One51 in particular that NTR wasn't moving fast enough to sell its wind assets in the US, and use the funds to allow shareholders who wish to withdraw to cash out. Investment company One51, which has a near 24% stake in NTR and is the company's second biggest shareholder, claimed it had suffered a €260m loss in its investment since 2007, which it claimed had caused a "catastrophic" loss to its own shareholders. Dublin-based family investment house Pageant Holdings, which has a 9% stake, claimed it had difficulty with the relationship between NTR and its largest shareholder Woodford Capital, whose chairman Tom Roche is also chair of NTR. NTR chief executive Rosheen McGuckian countered the criticisms by insisting the board was acting in the best interests of all of its shareholders.
HOUSEHOLDS 'MARGINALLY BETTER OFF' - Irish households became marginally better off during the first quarter of this year, according to new figures from the Central Bank. According to the bank’s latest set of quarterly financial accounts, published yesterday, household net worth increased by 0.9% during the first three months of the year; marking the seventh consecutive quarterly increase. At the end of March, net worth stood at €508.5 billion, or €110,312 per capita, reports the Irish Examiner. “Increases in household financial assets and the continued reduction in household liabilities contributed towards the rise in net worth during the quarter,” the Central Bank said in a statement. However, it added: “The rise in net worth, over the quarter, was partly mitigated by a decline in housing assets of €2.1 billion. The latter reflected the decrease in national house prices during the first quarter of the year.” Average household debt fell by €1.9 billion, representing a quarterly decline of 1.2%. According to the Central Bank, by the end of March, household debt stood at €164.3 billion.
HP WEIGHED BACKING OUT OF ACQUIRING AUTONOMY - Hewlett-Packard considered pulling out of its disastrous $11 billion acquisition of Autonomy before the deal closed, court documents have revealed says the Financial Times. The last-minute change of heart by the US technology group is the clearest indication yet of the doubts it harboured about buying the British software company, which later became the centre of major fraud allegations. HP went on to write down $8.8 billion of the value of the Autonomy acquisition less than a year after the deal was completed, blaming the revision on what it claims were accounting misrepresentations - which accounted for $5.5 billion of the writedown - that it only became aware of months after the deal was completed. The writedown has triggered a war of words between HP and former Autonomy management, with the UK company’s executives blaming it on HP management failures after the takeover. The US group has always maintained that it took no formal steps to withdraw from the acquisition process before it was completed in October 2011. However, court documents seen by the FT show that HP at least investigated whether it could back out of the deal.