TAXPAYER WILL TAKE HIT OF UP TO €1 BILLION IF DEAL FAILS - Anglo Irish Bank will require immediate taxpayers' assistance, possibly to the tune of €1 billion, if its deal to takeover the entire Quinn Group falls through, the Irish Independent has learned. Anglo is owed €2.8 billion by the Quinn family and the security for these loans are the shares in the Quinn Group. However, other creditors are ahead of Anglo in the queue and the only way it can jump the queue is by taking over the entire Quinn Group and paying off certain bondholders. If this does not happen the bank will have to write off some of the Quinn debts and take what is known as an impairment in its books. This would push the amount of capital it has below certain regulatory limits, forcing the bank to apply for additional taxpayers money via the Government. The bank has to disclose any major impairments each month to the regulator and the Quinn family are the largest borrowers of the bank in the country. The bank is believed to have already taken some write-downs but the majority have yet to come. If the Quinn debts are written down, the need for additional money is almost immediate
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DUNNE PREDICTS 20% DIP IN PROFIT - Ben Dunne expects profitability at his fitness centres in Dublin to decline by "at least" 20% in the current financial year due to the effects of the recession on membership fees, writes the Irish Times. Mr Dunne said: " numbers will be up but income will be down. Prices have softened a tremendous amount." He said membership fees have been discounted by more than 20% in the current fiscal year, which ends on May 31st. Mr Dunne opened a fourth gym in Lucan last December to add to his existing facilities in Blanchardstown, Kimmage and Santry. Accounts just filed for Barkisland (Developments) Ltd show that its accumulated profits rose to €5 million in the 12 months to the end of May 2009 from €4.5 million in the previous year. Westpoint in Blanchardstown recorded a loss for the year of €6,800, while Carlisle in Kimmage posted a surplus of €1.3 million. Santry had a profit of €900,798. Mr Dunne declined to say how many members his gyms have, but said they were receiving 30,000 visits a week.
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GLANBIA DEAL MAY NOT SUIT FARMERS' - Glanbia Co-op is expected to announce details of a possible €400m offer for the Irish business of Glanbia Plc next Tuesday, says the Irish Examiner. The co-op will then take the offer on a road show. An agribusiness specialist from University College Dublin (UCD) has described the proposed deal as highly questionable from a farmer perspective. Larry Harte, senior lecturer in Agribusiness at UCD, in a lengthy analysis on the proposed deal, warned that a weak milk price going forward could result in the loss of the consumer food business to the co-op members eventually. That happened in the case of Reox Holdings, which was spun out from Dairygold a few years ago when the intended aim was to protect farm incomes. If farmers pay themselves over the odds for their milk in the future, "they will do so to the neglect of other aspects of the business", according to Mr Harte.
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RIO TINTO ISSUES 'EXTRA GUIDELINES' FOR CHINA - Rio Tinto has issued 'extra guidelines' to employees about 'gathering information in China', after four Shanghai-based employees last month were convicted of stealing commercial secrets. The move may be followed by other companies operating in China, says the Financial Times. At its annual general meeting on Thursday, Rio came closer than before to acknowledging scepticism over the grounds of the commercial secrets conviction. "We know there are different definitions of business secrets in different countries, and also different cultural views on what is normal market information, and what is secret," said Tom Albanese, chief executive. "What I am clear about is that we would never ask our employees to do anything that we know is illegal." In a case that continues to be debated three weeks after its conclusion, Stern Hu, formerly Rio's top iron ore salesman in China, and three colleagues were convicted of taking bribes from steelmakers. In a closed-door segment of the trial they were also convicted of stealing "secret" information that apparently included insights in to the Chinese steel industry's negotiating position during iron ore pricing talks.
