AER LINGUS SALE: GOVERNMENT SAYS NO CONFLICT OF INTEREST OVER ADVICE - State agency NewERA has insisted that there are “detailed provisions” in place to guard against possible conflicts of interest regarding the provision of advice in relation to a sale of Aer Lingus to IAG.
The agency confirmed that checks are in place after it emerged that an investment index connected to one of the Government’s key advisers on whether to sell Aer Lingus has placed a ‘bet’ on the planned €1.36 billion takeover of the airline by IAG. The investment banking arm of global financial giant Credit Suisse is one of three firms appointed by Government agency NewERA to advise on whether or not it is in the interests of the State to sell its 25.1% stake in Aer Lingus. The Irish Independent has learned that an investment index operated by Credit Suisse’s separate asset management arm has a position in Aer Lingus shares, hoping to turn a profit on a possible sale of the airline going ahead. That fund - the Credit Suisse Merger Arbitrage Liquid Index - is focusing on the difference between the current price of Aer Lingus shares and the price IAG has indicated it would be willing to pay for them. The shares were changing hands yesterday for about €2.40 each. That is less than the €2.55 in total per share that IAG has already indicated it would pay if its takeover bid succeeds. In financial jargon, that difference is called the spread.
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IMF WANTS CENTRAL BANK INDEPENDENCE 'ENHANCED' - The International Monetary Fund has called on the Government to "enhance" the Central Bank's independence and said it should address the "significant" challenges the bank faces in attracting and retaining insurance supervisors. In a lengthy report on the insurance sector, the IMF said the Central Bank had made significant progress in updating the regulatory regime, says the Irish Times. The Washington-based institution said the impending implementation of a new European solvency directive was expected to address most of the regulatory gaps it noted. The total number of insurers in the sector declined from 307 in 2009 to 234 in mid-2014, but total assets held by Irish re-insurers increased to €210.7 billion at end-2013 from €139.5 billion in 2008. Although the IMF said there was no evidence of political and commercial interference over the Central Bank's operational autonomy, it found the legal framework for the bank's governance arrangements "may potentially introduce political considerations" that could have implications for its independence. "Effective supervision hinges on adequate supervisory resources of the right calibre and it is critical that [the Central Bank] builds on its current technical capacity to conduct quality supervision and to continue its enhanced supervisory approach introduced in 2011," the IMF said.
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BANK BACKS €180m FOR IRISH SOLAR FARM PROJECT - Amarenco, the solar energy business led by former Bord Gáis head John Mullins, has found a multi-million euro backer to help it deliver the country’s first solar farms with the inaugural project earmarked for Cork. One of the world’s largest investment banks with headquarters in Sydney, Macquarie Bank is willing to invest €180m in the solar venture which has plans for more than 30 farms across the south and south-east of the country. The Australian-listed lender will help finance Amarenco’s plans to deliver the country’s first wind farms, the majority of which have been pencilled in for Cork. Between 18 and 20 are likely to be dotted across the country’s largest county with the remainder in southern Tipperary, Kilkenny, Waterford and Wexford. “We’ve got designs done; we’ve specific plans; we’re now supported by a bank, Macquarie Bank which is probably one of the largest infrastructure banks in the world and they’ve come in for half that business so we’re developing it and they’re financing it. “This bank is ready to invest €180m in Irish solar at a time when maybe wind energy is coming across a number of challenges,” Mr Mullins told the Irish Examiner yesterday.
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SAUDI ARABIA SEES SUCCESS IN FIGHT TO RETAIN DOMINANCE OF GLOBAL OIL - Saudi Arabia says its strategy of squeezing high-cost rivals such as US shale producers is succeeding, as the world’s largest crude exporter seeks to reassert itself as the dominant force in the global oil market. The kingdom’s production rose to a record high of 10.3 million barrels a day in April and there is no sign that it plans to reverse its policy at next month’s meeting of Opec, the producers’ cartel, in Vienna. “There is no doubt about it, the price fall of the last several months has deterred investors away from expensive oil including US shale, deep offshore and heavy oils,” a Saudi official told the Financial Times in Riyadh, giving a rare insight into the kingdom’s thinking on oil strategy. The International Energy Agency, the world’s leading energy forecaster, on Wednesday released data backing up the Saudi position. The agency said that with the number of rigs running in the US plunging by 60% in response to lower oil prices, US shale oil production had “buckled” in April, “bringing a multiyear winning streak to an apparent close”. But the IEA also cautioned that it would be “premature” to suggest that Opec had “won the battle for market share”. It said global crude supply was growing, even from high-cost areas such as Brazil, as well as from other Opec member states such as Iran and Iraq.
