AIB LINES UP RECORD €3.4 BILLION LOAN PORTFOLIO SALE - AIB's latest troubled loans portfolio sale, initiated in recent weeks, contains debt that was originally valued at €3.4 billion, according to sources.
That's three times the previously reported size of the collection of non-performing loans (NPLs), known as Project Beech. It is comprised of buy-to-let mortgages and borrowings against commercial property and development land, says the Irish Times. Portfolios of loans put up for sale can contract by the time a deal goes through, as borrowers strike restructuring arrangements with banks or refinance elsewhere. However, if the transaction goes ahead as currently planned, it would be the largest individual book sale, based on original loan values, by a bailed-out Irish bank in the wake of the financial crash. Sources said that Project Beech should achieve about €1.4 billion and is expected to conclude in the first half of next year. The move follows AIB's sale of €1.1 billion of problem loans to a consortium led by US distressed-debt firm Cerberus earlier this year. This helped the bank reduce its level of NPLs ratio to 11% of gross loans as of the end of September from 16% in December 2017.
STATE LOSES €4 BILLION AS BREXIT CHAOS BATTERS BANK SHARES - A plunge in shares has wiped €4 billion off the value of the State's stake in bailed-out banks this year.
The massive drop in value raises a serious question mark over the Government's policy of holding on to the bank stakes for so long. Shares in AIB, Bank of Ireland and Permanent TSB have been battered, with the markets rattled by Brexit and fears of a full scale US-China trade war. The plunge means the prospect of recovering the costs of rescuing those banks is becoming more difficult, says the Irish Independent. Owen Callan, who analyses the banking sector for Investec, said the banks' shares "were a long way" from high points seen a year ago. "It's going to be quite a long time, I would think, before we're likely to revisit the highs," he said. The value of the State's 71% shareholding in AIB is down €3.61 billion this year. The 14% stake in Bank of Ireland has lost around €300m and the 75% stake in Permanent TSB has lost €200m. The timing of a sale is up to the Government, which has always said it would use the proceeds from a share sale to pay down Ireland's large national debt, rather than on areas like health or housing. A Department of Finance spokesman said officials "continue to monitor market developments on an ongoing basis". Finance Minister Paschal Donohoe has previously said that for a sale to go ahead, he would "need to be satisfied" that the State would get a fair price for its shares.
ALDAR TISSUES TO DOUBLE JOB NUMBERS FOLLOWING ACQUISITION BY ZEUS - The number of jobs at an Irish sustainable tissue manufacturer and distributor are set to double following the announcement that Zeus, the Irish-owned global packaging solutions company, has acquired Aldar Tissues.
The move will see Aldar double their existing 20 full-time jobs at their state-of-the-art Dublin facility over the next 18 months. As part of the Zeus group, Aldar are set to launch a new range of eco-friendly products in 2019 which will be made in Ireland from recycled tissue and packaged with Ireland’s first fully biodegradable and compostable film, says the Irish Examiner. Speaking on the acquisition of Aldar, Managing Director of Zeus, Brian O’Sullivan said: "Our acquisition of Aldar means that this Irish-owned business can double its workforce, ensuring jobs are kept in Ireland, and deliver its products to larger retailers across the country."
FRACKING PAUSED IN BLACKPOOL AFTER BIGGEST TREMOR TO DATE - Residents of Blackpool in the UK have reported feeling the tremors of an earthquake from nearby fracking operations that started two months ago.
The minor earthquake was not only the biggest yet but was on a par with one in 2011 that led to a moratorium on fracking. The 1.5-magnitude quake occurred at about 11.20am on Tuesday, shortly after the shale gas company Cuadrilla resumed fracking after a month-long break, writes today's Guardian. The firm's Preston New Road site is about one mile to the east of Blackpool. The tremor was far higher than the regulatory threshold of 0.5 magnitude - the level at which firms have to stop fracking, which involves pumping high volumes of water, sand and chemicals underground to fracture rock and release the gas within. The company said it would pause and continue to monitor seismic activity for the next 18 hours, in line with the regulatory regime, before resuming on Wednesday. In October, Cuadrilla repeatedly fell foul of tremors which breached the threshold, and is understood to have spent November carrying out tests with much smaller volumes of water. The firm appears to have restarted higher-volume fracking on Monday, when the first tiny tremors were registered.