ARDAGH PLANS €2 BILLION FLOTATION OF ITS METAL CONTAINER UNIT - Ardagh, the packaging giant controlled by Dublin financier Paul Coulson, has unveiled plans for a stock market flotation of its metal containers business that could value the unit at up to €2 billion.
Mr Coulson, who is executive chairman of the group, owns about a third of Ardagh, which has its roots in Irish Glass. Ardagh intends to retain majority control of the metals container division and will use the proceeds to either reduce Ardagh's €4.7 billion debt, or to fund acquisitions, writes the Irish Independent. Ardagh might make a play for the European operations of glass maker Verallia, which is owned by French industrial giant Saint-Gobain. That's on the market and expected to fetch up to €3 billion. Verallia makes containers for high-profile brands such as Nutella and Dom Perignon Champagne. Last year, Ardagh succeeded in buying Verallia's North America division for about €1.3 billion. The stock market debut of the metals division marks a diluted plan from Ardagh's previous intention to float the entire group in New York. Ardagh, which has operations in 21 countries, had planned an initial public offering (IPO) in 2011, but pulled that due to global market turmoil. The flotation was back on track in 2013, but was again postponed as the company battled the US competition watchdog for control of Verallia North America. Releasing full-year results yesterday, Ardagh confirmed that it's planning the IPO this year.
***
CIÉ SEEKS PARTNER TO BUILD OFFICE BLOCK IN DUBLIN'S TARA STREET - CIÉ is to avail of the strong demand for office sites in Dublin city centre and enlist a partner to develop a high-rise office block alongside Tara Street Dart Station and George’s Quay. The move comes as a range of developers and investment funds are pitching for suitable city centre locations now that the demand for office space has soared again and top rents are even higher than during the property boom. Instead of selling off the site of around one-third of an acre, CIÉ is anxious to lock in to an income stream with the successful developer who will handle the planning application and build out the project. The State transport company is prepared to either grant a 300-year ground lease or take 10% of the annual rental income from the proposed building, whichever is the higher, writes the Irish Times. Depending on the size of the office block approved for the site, a developer getting permission for, say, 9,290sq m (100,000sq ft) of office space and renting it at €538 per sq m (€50 per sq ft) could expect to pass on €500,000 a year to CIÉ from the €5m rent roll.
***
USIT TRAVELS BACK INTO THE BLACK WITH 20-FOLD INCREASE - Pre-tax profits at specialist student and independent travel firm Usit have increased 20-fold to €686,270 in 2013. Accounts just returned to the Companies’ Office, show Usit Ireland Ltd recorded the huge rise in pre-tax profits in spite of gross revenues falling 15% from €28.7m to €24.47m. The drop in net revenues was at a lower rate of 6% from €6.23m to €5.87m. The pre-tax profit of €686,270 compares to a modest pre-tax profit of €32,778 in 2012, says the Irish Examiner. The directors last year paid a dividend of €115,000. The principal activity of the group is the distribution of travel and work abroad programmes in Ireland to the student and youth sector. The directors say Usit’s operating profit before depreciation and amortisation increased to €1.17m from €700,318. A large factor behind the sharp increase in profits last year was the non-cash depreciation and amortisation costs falling from €692,926 in 2012 to €444,678 in 2013. The numbers employed by the group increased in 2013 from 84 to 86 with staff costs declining from €3.57m to €3.4m.
***
UK LOOKS TO PAD OUT SHRINKING DEFENCE SPENDING - UK Prime Minister David Cameron has asked ministers to investigate if the intelligence agencies budget can be counted as “defence spending”, as Downing Street eyes creative accountancy to head off US criticism of military spending, says the Financial Times. Amid anxiety in Washington that Britain’s defence budget will soon fall below Nato’s target of 2% of gross domestic product, Mr Cameron has asked whether he can boost it without actually spending more money. Oliver Letwin, head of policy at Number 10, has been asked to consider what kinds of spending can be categorised by Nato as “defence” expenditure in order to keep the UK close to the 2% target, one government figure said. “If we need to get to 2% of GDP, there is a question of whether you can increase overall spending by counting funding of the intelligence agencies as defence spending,” he said. A second government figure confirmed that officials were looking closely at what Nato classifies as defence spending to see if different member states include different elements to meet their target. The future of Britain’s shrinking war chest has burst into the open as a politically sensitive issue despite efforts by politicians to avoid becoming embroiled in yet another awkward budgetary issue before May’s general election.
