DESMOND INVESTS €17 MILLION TO SECURE STAKE IN DIAMOND MIND - Dermot Desmond, the billionaire financier, has invested a further $25 million Canadian dollars (€17.7 million) in Mountain Province Diamonds (MPD) to protect his stake in Gahcho Kue, the world's largest and richest new diamond mine, which is being developed in the Canadian Arctic. Mr Desmond bought the shares as part of a $100 million fund-raising by MPD this week to fund the mine's development, says the Irish Times. It maintains his stake in MPD at about 23%, held through his Bottin International Investments company. MPD owns 49% of the mine, with the rest owned by the global diamond behemoth De Beers, which will also operate it. The mine was valued on an in situ basis, or before production costs and at current diamond prices, at $20 billion in a presentation this month by MPD, which is listed in Toronto. Mr Desmond can effectively lay claim to about 10.6% of the value of Gahcho Kue, making it possibly his most lucrative investment to date, even compared to the huge profit he made when he sold London City Airport for £750 million (€955 million) in 2006. The presentation stated that when it enters full production, possibly in late 2016, Gahcho Kue will generate cashflow for MPD of $310 million a year.
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O'BRIEN SELLS STAKE IN AIRCRAFT LEASING FIRM AERGO - Aergo Capital, the aircraft leasing business co-founded by billionaire businessman Denis O'Brien, has been bought by US investment firm CarVal. The American company didn't reveal the purchase price, but the deal sees Mr O'Brien completely exit Aergo, says the Irish Independent. He owned 80% of the company, which was founded in 1999. Aergo's chief executive, Fred Browne, owned the remaining stake, which he has also sold to CarVal. However, he is reinvesting in Aergo under its new ownership, taking a 10% stake and will remain with the business. Dublin-headquartered Aergo leases a fleet of aircraft to carriers around the world including Dublin-based Cityjet. It also manages some aircraft on behalf of their owners. Last year, the company generated pre-tax profits of almost $2.3m (€1.7m), on revenues of $44.9m (€35.5m). Aergo sold its South African leasing subsidiary Safair to Dublin-based ASL Aviation in 2010, having bought it in 2008. "Aergo has been a very profitable business and I believe this transaction will see Fred Browne and the management team take it to further success in the aviation industry," said Mr O'Brien.
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GOOD VIBES AT ELECTRIC PICNIC KEEPS FESTIVAL PROFITS 'HEALTHY' - Denis Desmond of MCD said yesterday that this year's Electric Picnic recorded a "healthy" profit. This year was the second successive year that the festival recorded a profit and new accounts filed with the Companies Office - by EP Republic Ltd - which operates the event, show that it recorded pre-tax losses of €1.18m in 2012. This followed EP Republic recording combined losses of €2.1m in 2011 and 2010, writes the Irish Examiner. Mr Desmond said this year's festival sold out six weeks in advance and enjoyed excellent feedback from patrons and media. He said that 'early-bird' sales for next year's event were "way up on previous years". He attributed the successful festival to a very strong line-up and attractive ticket pricing. The EP Republic accounts show that the firm had total assets, less current liabilities, amounting to €513,755.
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WARREN BUFFET ADMISTS TESCO INVESTMENT 'A HUGE MISTAKE' - Billionaire investor Warren Buffett, staring at an $800m spillage from his stake in Tesco, admitted that his holding in the UK supermarket chain was a "huge mistake". The chairman of Berkshire Hathaway, which is Tesco's fourth-largest investor with a 3.97% stake, made his mea culpa on Thursday, contributing to the gloom surrounding the retailer as it deals with plunging profits and an accounting scandal. "I made a mistake on Tesco," he told CNBC. "That was a huge mistake by me." The Fincancial Times says that the admission puts Britain's biggest retailer into the company of the troubled airline USAir in the 1990s and bankrupt utility TXU in the past decade and a host of other investments that Mr Buffett has admitted were wrong-headed. These included taking control of Berkshire Hathaway itself, originally an ailing textile company; going into business with people he did not like, trust and admire; and missing out on opportunities handed to him "on a platter", he wrote in 1989. He likes to say: "You only have to do a very few things right in your life so long as you don't do too many things wrong." Tesco's share price fell to a new 11-year low on Thursday, down 1.1% to 178.20 pence. Its share price has lost 49% of its value this year as it struggles to fend off aggressive competition from discount rivals Aldi and Lidl, and people moving away from shopping at its large hypermarkets.
