STATE DECISION ON AER LINGUS MAY BE MADE BY EARLY APRIL - The Government could decide on a sale of the State’s 25.1% stake in Aer Lingus early next month, according to the flag carrier’s chief executive, Stephen Kavanagh.
Aer Lingus’s board and management have already backed IAG’s €1.36 billion proposed offer, which is conditional on the State and Ryanair agreeing to sell their holdings in the company, says the Irish Times. Mr Kavanagh suggested the Government could make a decision on the State’s stake shortly after Easter, which falls on the first weekend of April. “I am pretty comfortable that there is now a timeline and that an end is in sight,” he said, before taking part in the Capa Centre for Aviation annual chief executive’s conference in Powerscourt Hotel in Wicklow yesterday. He added the indications were the Government could reach some conclusion in the next two to three weeks but stressed he could not predict what the decision might be. “I’m not confident, but the opportunity we believe is clear. We genuinely maintain the position that it [a sale to IAG] is positive for all stakeholders,” he said. “In that context we are hopeful that the right decisions are taken, but we’re not in any way complacent or making any presumptions.” It emerged last week that Etihad Airways, holder of almost 5% of Aer Lingus, will probably sell its stake if the Government backs the IAG offer. James Hogan, chief executive of the Gulf-based airline, reiterated this in an interview with the Financial Times.
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MAJORITY OF BAD LOANS BELONG TO SMEs, ROUX SAYS - Two-thirds of bad loans in Ireland relate to commercial lending, including property-related debt involving small and medium enterprises. Of those, one third have a poor prospect of being recovered. The stark figures were set out by financial regulator Cyril Roux yesterday, laying bare the difficulties facing many businesses, says the Irish Independent. At the Chartered Accountants Ireland Leinster Society lunch, Mr Roux said most of the public attention has focused on bad mortgage loans despite it being a smaller share of the overall amount of distressed loans. "Although this is understandable given the difficult and personal borrower issues involved in mortgage arrears, the scale of the issues in the banks' commercial lending books are significantly larger than the amounts at stake in mortgage lending," said Mr Roux. "Approximately two-thirds of loans have good prospects of returning to viability, but, and here's the point, it will take time." Mr Roux said the State's banks, after an initial ad hoc response to the debt crisis, are now trying to resolve distressed commercial loan portfolios. He said many businesses have excessive property debt tied to a core business that is viable. The resolution of these loans requires the separation of the viable business from the legacy property debt, he suggested.
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IDA DELEGATION IN DAVOS PAID OUT €1,000 A NIGHT - The IDA delegation to Davos, led by CEO Martin Shanahan, avoided the sky-high accommodation prices at the resort but still paid over €1,000 per night. New figures released in response to a freedom of information request show that the cost of accommodating the four-strong IDA group totalled €5,663 over five nights. Accommodation prices in Davos in Switzerland itself were too costly and the four IDA delegates retreated to the nearby Klosters where they rented an apartment, says the Irish Examiner. The cost to the IDA of attending Davos was €18,780 including a payment of €10,517 to Hotel Grischa where the IDA staged an event where Taoiseach, Enda Kenny also participated. In the five-day visit, Mr Shanahan was accompanied by executive director, Dermot Clohessy and two other staff members from the CEO’s office. A statement from the IDA’s freedom of information unit accompanying the figures says “the high-profile nature of the event at Davos translates into high demand and increased prices in and around Davos. It adds: “Given the prohibitive nature of accommodation prices in particular in Davos, the IDA delegation secured an apartment rental in Klosters 30 minutes from Davos and travelled via train to Davos. "The accommodation rate was negotiated on a commercial basis and relative to hotel room costs for the period, represents better value for money," it added.
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PREMIER LEAGUE CLUBS SCORE FIRST COLLECTIVE PROFIT SINCE 1999 - Premier League football clubs made their first collective profit in 15 years last season. Clubs kept a lid on wages to avoid falling foul of rules designed to curb the spending of wealthy owners, says the Financial Times. The 20 teams in the world’s most commercially successful football league made a combined pre-tax profit for the first time since the 1998-99 season, helped by the first year of revenues from a £3 billion three-year television rights deal signed in 2012. Pre-tax profits of £190m in the 2013-14 season were almost four times higher than the previous record of £49m in 1997-98 and are the first step towards clawing back £2.6 billion of losses made over the past decade. The figures - compiled by Deloitte, the business advisory firm, using the clubs’ financial statements - showed that wage costs as a proportion of revenues fell to their lowest level since the 1998-99 season. Dan Jones, a partner at Deloitte’s sports business group, said last season was a “transformative moment” that showed Premier League clubs could keep a grip on costs while still attracting top players. “You can afford to compete on talent and still have money left at the bottom line,” he said. Wage costs increased 6% to £1.9 billion as the wage/revenue ratio fell from a record high of 71% in the 2012-13 season to 58% last season.
