US MOVE BLAMED FOR COLLAPSE OF KIELY FIRM - An expensive move to open a store in New York City led to the collapse of the Orla Kiely retail fashion empire, according to its administrators.
The collapse of Kiely Rowan plc with debts of £7.25 million (€8.4 million) in September 2018 sent shock waves across the retail and fashion industries as the long-established business was on an upward trajectory having reported increasing revenue and operating profit for 2017. The second progress report by joint administrator Chris Newell sheds light on the reason for the clothing business collapsing even as Ms Kiely's separate licensing business continues to expand, says the Irish Times. In a 29-page report lodged with Companies House in the UK, Mr Newell said: "Part of the explanation for the failure of the business appears to be the amounts utilised to fund the business in the US entity. It appears that the opening of a new shop in New York created a drain on the cash flow, causing the requirement for additional borrowing which eventually led to the collapse of the whole group," Mr Newell said. Mr Newell said that "investigations into this matter and the actions of the directors in funding the US project to the detriment of the remainder of the group [are] currently ongoing". Ms Kiely and her husband, Dermott Rowan, were the company’s directors at the time of the collapse and Mr Newell said the focus of the joint administrators was now on fully exploring the flow of funds through the Orla Kiely group companies - Killyon Stem LLP and Kiely Rowan plc.
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APOLLO LINES UP RESALE OF BOOM ERA MORTGAGES - US private equity giant Apollo is planning to re-sell Irish mortgages it bought five years in one of the first of what became a wave of loan sales, the Irish Independent understands.
The sale is to an entity backed by US insurance firm Athene, which Apollo has previously been accused of "looting" by charging hundreds of millions in fees for managing its assets. Apollo yesterday struck a deal to lift its stake in Athene. In a letter seen by the Irish Independent, Apollo unit Tanager notified borrowers their mortgage will be sold for a second time, with a deal likely to close by year end. The complex deal will see some of what was a €322m mortgage portfolio bought by Tanager in 2014 sold to a newly incorporated Irish company IRMT BW1. The ultimate buyer is not named in the letter. The Irish Independent understands that loan servicing firm Pepper will have legal title to the mortgages following the sale, but is not the ultimate beneficiary. Paperwork filed with the Companies Office here shows that Athene Annuity Life Assurance registered a charge this month against the assets of IRMT BW1. That would indicate that it is ultimately financing the structure. Pepper has been servicing the home loans on behalf of Tanager and will continue to be the servicer following the sale that's now in the works. Apollo declined to comment.
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UK TREASURY ON COURSE TO EXCEED THIS YEAR'S DEFICIT TARGET BY £16 BILLION - The UK government is on course to overshoot its deficit target this year by £16 billion after a series of spending pledges, a slowdown in the economy and the spiralling cost of student loans stripped the Treasury of £43 billion.
The Resolution Foundation, an independent thinktank, warned that the £27 billion of spending "headroom" set aside by former chancellor Philip Hammond in March to cope with the costs of Brexit had evaporated over the last six months, leaving the government with a hefty deficit, says today's Guardian. In a report that was due to be released ahead of Sajid Javid’s first budget on 6 November, which was scrapped last week, the independent thinktank said the Treasury was going to be left with little option but to break its rule that caps the annual shortfall in spending at 2% of GDP. Labour has criticised Javid for refusing to publish official budget forecasts by the Office for Budget Responsibility, which are expected to be cancelled along with the budget, knowing they are likely to show the government has breached its deficit rule. A slowdown in the economy this year following a slump in manufacturing and construction activity has reduced government income by more than £10 billion in the next financial year, the report estimated. Revisions to the treatment of government liabilities, including student loans, many of which are unlikely to be repaid, added a further £19 billion to the total deficit. Extra spending commitments on hospitals, police and schools added another £13 billion, the report said, increasing the shortfall between income and expenditure since March to £43 billion.
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VIRGIN GALACTIC TO TOUCH DOWN AT BRITISH SPACEPORT - The UK government has shortlisted five sites for the first Virgin Galactic spaceport in Britain, Sir Richard Branson said yesterday, as the company made its stock market debut in New York.
Shares in the first publicly traded human spaceflight company rose by as much as 9.5%, giving it a market capitalisation of about $2.5 billion, writes The Times. Virgin Galactic, founded in 2004, aims to take passengers into space on sub-orbital rides, during which they will briefly experience weightlessness, witness the curve of the Earth and see the thin blue line of the atmosphere. Tickets will cost $250,000. The company has collected $80 million in deposits from 600 would-be astronauts, including Leonardo DiCaprio, the actor, and Justin Bieber, the pop star.
