Archive for February, 2013

As the old Moscow Rules say, once is happenstance, twice is coincidence and three times is enemy action. So when not one, not two but three residences of Northern Ireland NAMA developers come onto the market together, it’s noteworthy.

Now, although developer David Agar complained that NAMA wouldn’t be happy until all developers were driving around in Ford Cortinas and living in three-bed semis, the truth is that NAMA seems to be generally relaxed with sub-€1m family homes. Back in 2011, when Neil Callanan was doing a stint at the Independent, he reported “several sources also said that the family home the developers end up in must be worth less than €700,000, or €500,000 in some cases.” The following three Northern Ireland homes wouldn’t seem to break NAMA’s rules, so it is all the more interesting that they are all on the market at once.


First up, we have Malachy Murdock’s residence as presently recorded with the website, company-director-check.co.uk – 40 Greenan Lough Road, Newry, county Armagh, BT34 2PX. The property is on sale through estate agents, Eoin Lawless and this is its listing at PropertyNews.com. It is a substantial five bedroom property on an acre and is being offered for sale at GBP 650,000 (€754,000). Malachy is one of the directors of the Murdock Group, some of whose loans have been transferred to NAMA – specifically, according to the BBC, those in Rathdrum Properties, Murdock Nursing Homes and Clyduff. Malachy’s brother Ciaran Murdock (49) is the main driving force in the Murdock Group, but Malachy (48) is a director.


Next we have Chris Kennedys residence as presently recorded with the website, company-director-check.co.uk – 10 Knocktarna Grange, Coleraine, county (London)Derry, BT52 1HN. The property is on sale through estate agents, McAfee Coleraine and this is its listing at PropertyNews.com. It is a fine 5-bedroom property and is being offered for sale at GBP 525,000 (€609,000). Chris is a director of the Kennedy Group Properties Limited, which is in NAMA.


Fellow director in the Kennedy Group, Daniel Kennedy also has his residence, as recorded with the website, company-director-check.co.uk – 154 Mountsandel Road, Coleraine, county Antrim, BT52 1SW. The property is one sale through estate agents Bensons and this is its listing at PropertyPal.com. It is another fine 5,500 sq ft 5-bedroom detached property on what estate agents on this side of the Border would call a “large site” and it has a price most familiar to estate agents here – “price on application”.

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Well, Bank of Ireland has prevailed.

Minister for Finance Michael Noonan has announced this afternoon that that the so-called “Eligible Liabilities Guarantee” scheme will end for all new liabilities from midnight on 28th March 2013. The ELG scheme meant that deposits and bonds and all other money loaned to the banks whilst the ELG was in operation would have a backstop guarantee from the Government, so if the bank failed, then the Government would step in and cover 100% of what was owed to depositors, bondholders and other lenders to banks.

The ELG was provided by the Government but it made a charge for it. Last year, it took in €1,024m in ELG fees after taking in  €1,236m the previous year, and guess what? Bank of Ireland which is now only 15%-owned by the Government wasn’t happy with having to hand over so much protection money, when Bank of Ireland felt that it was strong enough to attract deposits and loans without having the ELG in place.

The scheme was supposed to have continued until June 2013, so this announcement this afternoon is a bit of a surprise. It almost certainly means that Bank of Ireland has got its own way with Minister Noonan. There is no explanation today as to why the scheme has been ended earlier than previously.

But what about the other ELG banks – AIB/EBS and Permanent TSB?

The assessment on here is both of these banks are still in difficult straits with the potential for full-blown mortgage crises which threaten to create a wave of new losses. And Permanent TSB isn’t quite a “pillar bank” or at least it wasn’t one of the two “pillar banks” which the Government committed to supporting in March 2011.

So, could there be a Project Orange in the works right now in the Department of Finance to emergency liquidate PTSB, just as Project Red was in the planning pipeline since at least 12th October 2012? Remember that depositors at what was Anglo and Irish Nationwide are today nursing losses of at least €93m following the special liquidation three weeks ago.

But don’t panic. Even after the ELG is withdrawn, your deposits will still enjoy a guarantee of €100,000, and this is backstopped by the Central Bank of Ireland which has a €388m fund for such claims, and that fund is constantly replenished with an annual 0.2% levy by the Central Bank on all deposits in the State.The Department of Finance has issued some guidance notes that may reassure you further.

But if you have deposits of over €100,000, you might want to consider the health or AIB/EBS and PTSB closely, because the view on here is that neither is in the healthiest of states, and that with continuing high unemployment, the prospect of further property price declines, interest rate increases, less income as a result of the property charge, water charges, Croke Park 2 and anaemic domestic growth, both banks might be back looking for further handouts, and there is less than full support from the Government for PTSB in particular.

UPDATE (1): 26th February, 2013. PTSB has just issued a statement welcoming the Minister’s announcement this afternoon. The statement says “permanent tsb bank has welcomed the announcement today by the Minister for Finance of plans to bring the ELG scheme to an end.  A spokesman for the bank said: “permanent tsb has supported calls in recent months to bring the ELG scheme to an end and we very much welcome the decision to do so that has been announced today. This is a further sign that the Irish banks – including permanent tsb – are now able to fund their ongoing activities in the market without the requirement for Government support and that’s to be welcomed by all.”

UPDATE (2): 26th February, 2013.  Although PTSB has not been referred to as a pillar bank, in January 2013, the Department of Finance did issue a statement to the Sunday Business Post Jon Ihle which said “The Minister outlined the concept of Pillar Banks, being Bank of Ireland and AIB, in his speech of 31st March 2011. This concept was to strengthen these banks through recapitalisation and restructuring in order that they could play a material role in the provision of credit to the economy, as universal banks providing nationwide coverage and a full range of services to retail, SME and corporate customers.  At that time the future strategic direction of Permanent TSB was less certain. Since then we have agreed a way forward for Permanent TSB with the Troika which envisages it playing an important role in the future of Irish retail banking, being a more focused retail bank bringing an element of competition to the marketplace which has consolidated significantly since 2008” and this evening a PTSB spokesperson has said that PTSB has no issues in terms of funding its ongoing requirements in the market at competitive rates without any need for Government support and that specifically, it has the April 2013 bond redemption of €1.3bn covered.

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It’s a reflection of Ireland in the 2000s. The fabulously successful Westlife pop group sold millions of singles, and one of its members Shane Filan branched out into property development with his brother Finbarr. Initially made a few bob, but then the crash came, the development company Shafin Developments (SHAne and FINbarr) had receivers appointed last May 2012, and Shane headed to the UK where he has been declared bankrupt, though he is scheduled to be discharged in June 2013.

Today, his mansion in Sligo has come on the market through agents Sherry Fitzgerald with a price tag of €990,000. There is a listing on Daft.ie complete with 28 photographs of the 5-bedroom mansion on just under 5 acres, in the “southern suburbs” of Sligo town. Below is a photograph of the property via Daft.ie and the bankruptcy record at the UK insolvency service in which Shane’s address is withheld.

So, a bit of a sad day for Shane perhaps as his affairs are unwound, but it could be worse, he could have married Kerry Katona.

ShaneFilanBankrupt ShaneFilanGaff

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What: Allsop Space sale of 150 Lots, mix of residential, commercial and development, Dublin and provincial, catalogue here. Note that of the 156 Lots in the original catalogue, six have been withdrawn.
When: Friday 1st March 2013, from 9.30am (auctioneer announcements from 9.15am)
Where: Shelbourne Hotel, St Stephen’s Green, Dublin 2
How much: The maximum reserves for the 150 Lots are €14.9m.

This will be the 10th Irish property auction organized by Allsop Space – Allsop being the UK property auctioneer which specializes in distressed property sales and Space being the Dublin-based estate agency. The previous nine auctions have raised €123m and have transformed the Irish auction experience through transparency and efficiency. Two years ago, a “mega auction” was the description used in Irish media for an auction with 20 Lots; what superlative would apply this coming Friday when Allsop Space will be offering 150 Lots? Allsop Space also championed the “maximum reserve” concept so punters know that over that advertised price, the Lot will definitely sell to the highest bidder.

There is the usual mix of residential, commercial and development, though the commercial weighting is more pronounced than previously. There is also a heavy weighting of residential buy to let properties. If Fiona Muldoon’s words of advice to the banks are taken on board, then we might expect more of these to come onto the market in future auctions.


I think Allsop Space is proud to be selling musician Roger Whittaker’s detached home in Eyrecourt in Galway – pictured above. Not only does it add a little razzamatazz to proceedings but it underlines the fact that some properties on sale are not distressed and have not been the subject of bank foreclosures. The detached property in Galway comes with its own studio and gym and has a maximum reserve of €275,000. There’s an estate in Leitrim with a maximum reserve of €250,000, a shop on Capel Street with a MR of €500,000 and 400 sq ft of office space in Harold’s Cross with an MR of €21,000. There’s a 4,500 sq ft warehouse close by to TV3 studios in Ballymount with an MR of €90,000 which might help us assess the health of the industrial sector.

Allsop Space produced in January 2013, a review of its auctions to date which show that although there is strong overseas interest, 87% of buyers are Irish, that cash and mortgage sales are now about evenly balanced compared with 85% cash at the first Allsop Space auction in April 2011, 93% of Lots sell and, although it doesn’t appear in the review, on here it is calculated that the average “premium” realized above the maximum reserve is about 30%.

Carol Tallon at Buyers Broker Limited should be live Tweeting from the auction on Friday and you can follow her here, and if the technological gremlins don’t play up on Friday, then Allsop Space should be live streaming proceedings as well as hosting live bidding – details here.

UPDATE: 1st March 2013. The auction concluded at around 3.30pm today. Gary Murphy presided for most of the proceedings which went off without incident. The results are lackluster compared with previous auctions, with an 81% success rate as the hammer fell (three more properties were sold after the auction so I guess Allsop Space will claim a 83% success rate). €13.1m was spent on 112 properties which had maximum reserves of €9.9m meaning the average price achieved was 32.4% above max reserve. 18 Lots were withdrawn, up from six last week and nine earlier this week, and the suspicion will be that the auctioneers withdrew some Lots which would not attract sufficient interest. Still €13.1m plus the three post-auction sales is not bad. There were a lot of regional sales this time around. Yields ranged from 6% upwards. We should have some additional analysis tomorrow with reaction from Allsop Space. Here is the summary, you can full Lot details here.


UPDATE: 5th March, 2013. Overall, Allsop Space claim a success rate of 86% after after-sales are taken into account – that’s 119 Lots worth €13.75m, compared with just 83% or 112 Lots sold under the hammer or 115 Lots sold during the auction. There is limited demand for commercial property in poor locations or with poor leases, with the same going for secondary residential property  in areas of over-supply. Having said that, there is strong demand for well-located property with performing tenants on new leases. Residential investment property in Dublin city centre is enjoying buoyant demand. A house in Cabra sold to a Chinese national whilst a pub in Buttevant sold to a bidder from Lithuania. The largest lot of the day 20 Herbert Street in prime central Dublin sold for €640,000. The property comprised of a vacant freehold mid terrace Georgian building extending to approximately 346 sq m (3,733 sq ft). An online UK bidder succeeded in securing the former home of singer Roger Whittaker for €285,000. The Old Convent in Eyrecourt, Co Galway includes a recording studio, gym and outhouses.  37% of the auction buyers purchased with pre arranged finance indicating that the Irish banks are lending, proving their confidence in the auction property market. Recent auctions have been 50:50 cash and mortgage so this result indicates cash is back as king.  38% bought for owner occupation, 57% for investment and a 5% for development.  Proving that the auction process is equally popular to sellers as buyers, 74% if the buyers at the auction claimed they would sell their property at auction.  In the commercial market Cork’s Munster Rugby shop sold for €295,000. Several lots in the licence and leisure sector were successfully sold including The Farren Well Bar, Co Cork a freehold mixed use building including a public house and first floor one bedroom apartment. The lot sold for €192,500 with maximum reserve of €150,000. A 27 bedroom hotel in Co Clare in the South West of Ireland sold for €305,000 with a maximum reserve of €215,000.  Speaking after the sale Robert Hoban, Director of Auctions commented ‘The level of bidding on properties within the main urban centres was very encouraging. This is in line with recent reports on the apparent strengthening of the city markets. Tenanted properties in Cork, Dublin and Galway attracted multiple overseas bidders, driving prices up and yields down.”

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I mean what’s the problem? A Limerick developer is offering to pay off a €86.5m judgment to NAMA at the rate of €1,000 per month, which in a mere 7,208 years should see the debt totally cleared, ignoring additional interest of course.

And yet still, NAMA is pursuing Michael Daly, of Fordmount fame, over the transfer of his share in the family home to his wife in 2009 and the sale of assets – which were reportedly previously valued at €11m – for a mere €2.

And before you think that Michael transferred his share of the family home to his missus to deprive his creditors, think on. Not only is Michael claiming that he executed the transfer out of “natural love and affection” but Michael even obtained a declaration of solvency from a firm reportedly founded by former colleagues of Michael at Grant Thornton. That firm, referred to yesterday as the HDS Partnership – which appears to be a Limerick firm whose partners are Dara Smyth, Eddye Duffy, Louise Matthews, Gearoid Flannery and John Hinchy – is also said to have audited the Fordmount Group, Michael’s property group.

And before you chortle that there must be something fishy about this, because surely in 2009 it would have been apparent that the game was up for the property industry, again think on. Remember PwC, E&Y, Deloitte, KPMG and Jones Lang LaSalle were engaged by the Department of Finance at the end of 2008 and start of 2009 to examine the state-guaranteed banks’ loan book and failed to predict the scale of losses which we eventually shouldered. Take a look at the €6m of invoices from these fine firms, and then bear in mind the ultimate gross cost of €70bn of bailing out the banks. The HDS declaration of solvency might be presented in a poor light in today’s reporting in the Irish Times, but far, far bigger firms got their valuations and declarations badly wrong when compared with subsequent losses.

I mean if John Mulcahy’s Jones Lang LaSalle was unable to predict the scale of future losses in late 2008 and the start of 2009, then how can NAMA, who today employs John as a board member and its most senior property man, criticize the declaration of solvency prepared by the Limerick firm of accountants in 2009.

And as for the sale of multi-million euro assets in a German company for just €2, the Irish Times reports “The shares sold had no value and the supporting assets were still in place, he [Michael] said.” So, on the face of it, the sale might sound fishy but in the property business, there were substantial collapses in values and if the German firm was a property company, then assets that were “previously valued at €11m” could well be worthless.

Michael was in the Commercial Court before the redoubtable Judge Kelly yesterday where NAMA successfully sought permission to examine Michael before the court over his financial affairs and dealings. The Judge, whilst noting that Michael had already provided substantial documentation and had been intensively examined by NAMA’s solicitors, still granted NAMA its application noting that NAMA had a very low threshold of argument to overcome to win the examination.

The upshot is that we will have a day or two of examination of Michael by NAMA before Judge Kelly in April 2013. Other developers will be watching these proceedings intently because they are likely to be repeated a number of times in future in other cases.

[Credit to Mary Carolan in the Irish Times today whose report is the basis for the above blogpost. Mary reminds us that in the original judgment which saw €86.5m awarded against Michael Daly, the judge dismissed the claim that when the loans were originally provided by Anglo, that Anglo had provided  “oral assurances from Anglo executives that personal guarantees provided by him over loans were secondary to security taken by the bank and would never be relied upon”]

UPDATE: 1st May, 2013. NAMA is back in the Commercial Court division of the High Court this week. Today, the feature appears to have been a €300,000 payment by Michael to his wife

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The white smoke has emerged from Lansdowne House where unions and the Government were renegotiating the so-called Croke Park Agreement governing pay and conditions for Ireland’s near 300,000 public sector workers.

The headlines are available from the Department of Public Expenditure and Reform here. The cut that will probably attract most immediate attention is the direct cut to gross salary for those earning in excess of €65,000 in pay and allowances each year. Although there has been no announcement yet, it is being assumed here that the cuts will affect politicians who are supposed to be part of the public sector.

That being the case, An Taoiseach Enda Kenny’s salary will fall from €200,000 to €185,350, with the calculation of the cut shown below.


When An Taoiseach came to office in March 2011, one of his first acts was to cut his pay and that of An Tanaiste, ministers and ministers of state by 6.6%, so An Taoiseach’s salary went from €214, 187 to €200,000 which was a gesture of sorts, but nothing like the €82,000 cut to the French president’s salary introduced by Francois Hollande in 2012 which brought the salary for that post down from €253,000 to €171,000.


And after today’s decline, An Taoiseach will still earn more than his counterpart in the UK, Sweden, Holland, France and Finland. Bigger economies, which are presently bailing us out. And An Taoiseach will still be earning more than double the salary of the prime minister of Spain, which is subject to a bailout of sorts, but which has an economy 10 times bigger than ours and a population 8 times greater.

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John McManus has a column in today’s Irish Times which comments on the report produced by the UK’s Competition Commission last Friday on the so-called Big Four accounting firms – Deloitte, Ernst and Young, KPMG and Pricewaterhouse Coopers. The online version of John’s column omits a table referred to in the body of his piece, and it seems like a very useful piece of information, so it is being reproduced here. Separately the UK Competition Commission press release from last Friday is here and its report for the UK is here.

The Irish Times has a listing – not available online that I can see – called “Top 1,000 Auditwatch” which presumably shows the auditor of the Top 1,000 Irish businesses. And this is what the table below is based on. The second column, “volume” appears straight forward, for example PwC audits 219 out of the 1,000 biggest companies in Ireland. “Value” is more ambiguous and it is not quite clear what value relates to, audit fees or company revenues are two possibilities.


In Ireland’s case, we really have a Big Three – Deloitte has a relatively measly 10% by value. The UK Competition Commission has rejected the more serious of competition concerns, for example, that large audit firms were undercutting smaller firms, but there are concerns which will be further examined, that auditors place management above shareholders when it comes to prioritizing duties; this is rejected by the auditors, but it does have resonance with our experience of failed Irish banks.


In the UK, there is even more concentration than in Ireland. The figures below are extracted from John’s article so blame him for one set adding up to more than 100%!

Finally, it might be worth reminding you of the auditors of our banks during the boom.

You will find a feature blogpost on auditors here.

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Yesterday’s Sunday Business Post reported that the two principal lenders to the Tougher Oil distribution businesses, NAMA and Ulster Bank, had agreed debt writedowns as part of a deal to sell the businesses to Cork-based haulage company, Masterlink Logistics. In NAMA’s case the writedown was reported to be €26m of a €44m loan, and in Ulster Bank – I think they mean Ulster Bank and Bank of Scotland – the writedown is €50m.

Masterlink appears set to take control of the network of petrol stations in and around Kildare, and the fuel distribution business in a deal said to be worth €7-8m.

We find out from last Friday’s edition of Iris Oifigiuil belatedly printed this morning that NAMA last week had receivers appointed to assets of Newhall Business Campus Limited, Newhall Construction Limited. Tougher’s Oil Distribution Limited, Tougher’s Retail Limited and Greenbury Investments Limited. In all cases, Neil Hughes and Kieran McCarthy of Hughes Blake Chartered Accountants were appointed to the assets on 19th February 2013.

The five companies are controlled by the Thomas Tougher (67) and Geraldine Tougher (65).

Whilst Tougher’s Oil Distribution Limited and Tougher’s Retail Limited might be on their way to Masterlink, the fate of the other three companies is unclear.

There is a feature blogpost on Tougher’s Oil examinership here.

Remember you can see the list of NAMA’s enforcement actions here and in this regularly updated spreadsheet.

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Last weekend was partly spent in the pleasant surroundings of Liberty Hall in Dublin where a “counter” summit was organized by some Left wing parties; it was “counter” to the series of summits being hosted by Ireland as part of our six-month presidency of the EU.

It was a colorful affair with a distinct Left-wing tint, there was a trestle table of books on socialism and the like, with “The Grapes of Wrath” thrown in, attendees addressed each other as “comrade”, if they were to donate 10c to a collection box every time the word “class” was uttered – as in, ruling “class”, working “class”, political “class”, professional “class” – we would probably have enough to have paid the €3.06bn that was scheduled to have been paid on the Anglo promissory note in March before the abrupt liquidation, there was the recently-released-from-prison, Scotland’s Tommy Sheridan rousing some of the fairly-well attended talks, there were a few TDs including Richard Boyd Barrett who was billed as being from the “People for Profit” party, more aspiring TDs and MEP Paul Murphy. Well done to them all.

For those of you unfamiliar with the basic aims of the Left-wing of politics, MEP Paul Murphy was clear that one such aim was the nationalization of industry. Some of you might regard that as failed Communism, but when you think about it, we seem to doing just that in Ireland.

Most of our utilities are publicly owned, with minimal private sector competition. Farming has long since been a state-subsidised activity. The most recent nationalization has been the banking sector where we own 15% of Bank of Ireland, 99.8% of AIB and EBS, 100% of the Anglo/Irish Nationwide husk which is being liquidated, 99.5% of Permanent TSB and we recently provided €250m to the credit unions, and of course we own An Post. There is some private sector competition, but we largely control Irish banking.

And having ticked banking, we are now set to tick the media sector also.


We already own the biggest media company in the State, RTE, and we are footing the bill for the €70m loss at RTE in 2011 – that’s a deficit of €17m and other losses including pension losses – and the speculation is that RTE racked up a deficit alone of €50m in 2012.  Somehow we tolerate RTE paying obscene salaries in a media market 1/15th the size of the UK’s whilst turning in such astounding losses. But then again, that sort of behavior is the very epitome of a nationalized enterprise.


Beyond RTE though, we learned this week that Independent News and Media may shortly be knocking on our doors looking for a bailout, or at least a debt write-off. We own, or part-own some of the eight banks that together have lent €400m-plus to IN&M [UPDATE: 25th February, 2013. According to the Sunday Business Post yesterday, €150m of the €430m borrowings “are understood” to be from Bank of Ireland and AIB. It is stated in a separate article in the same newspaper that Bank of Ireland is owed €80m, so presumably that means that AIB is owed €70m]. And given IN&M is balance sheet insolvent to the tune of €200m at 30 June 2012 and probably closer to €300m insolvent now, we are probably looking at taking a hit, though of course we could demand a share of the equity in IN&M which is worth, ahem, €16m. IN&M publishes the Independent, Sunday Independent, Evening Herald, Sunday World, Irish Daily Star, Belfast Telegraph, Sunday Life (like the Sunday World in Northern Ireland) and some provincial newspapers.


Down in Cork, Thomas Crosbie Holdings has been hanging on for months despite its lenders, who are owed €25m, appointing consultants to examine restructuring options. Its lenders are understood to be AIB. TCH’s main titles are the Irish Examiner, Sunday Business Post and the Evening Echo but it also publishes Western People, Roscommon Herald, The Nationalist (in Carlow), Kildare Nationalist, Laois Nationalist, Waterford News and Star, Wexford Echo. It operates four radio stations – Midwest Radio, Red FM, Beat 102, WLR FM as well as the websites BreakingNews.ie and RecruitIreland.com. It formerly owned the Irish Post in England which was closed in 2011, with the latest being that unsecured creditors are likely to get 6c in the euro in settlement of debts. The latest accounts for TCH are for 2010 (to 2nd January 2011) and they indicated a pre-tax loss of €6m on €72m of sales. Given the circulation figures this week  showed the Examiner’s circulation decline by 6% in 2012 after a 9% decline in 2011, and given the challenging economic backdrop, it is hard to see how the group would have improved its performance and standing in 2011 and 2012.


RTE’s main competitor, TV3 will have been studying recent developments in the Irish Bank  Resolution Corporation liquidation with great interest. Its main backer Doughty Hanson reportedly owes over €80m to what was Anglo, though reports in early 2012 suggested that IBRC had agreed to “park” this debt pending a sale of Doughty Hanson’s stake in the business.


The latest results for the Irish Times are for 2011 and showed its after-tax loss at €1.8m on sales of €90m. Whilst still not particularly healthy, the group is cash rich with €10m on hand. However, the circulation figures this week showed an 8% decline for 2012.


And how is the radio sector doing? Aside from RTE, the main private sector radio broadcaster in the State is Denis O’Brien’s Communicorp which in Ireland operates 98FM, Today, Newstalk, Phantom, SPIN and SPIN south west. It also operates radio stations in Hungary, Bulgaria, Latvia, Jordan and until recently Finland, Estonia, Czech Republic. Its latest accounts for 2011 published in November 2012 showed a modest loss of €400,000 down from €2m in 2010. The group has borrowings from Ulster Bank and Bank of Ireland which are now understood to stand at just over €80m.


UTV, the TV broadcaster that operates the ITV franchise in Ulster, is, on this side of the Border, Communicorp’s main private sector competitor in radio. It operates Q102 and FM104 in Dublin, LMFM in Louth and Meath, Live95FM in Limerick, Cork96FM, Cork-based C103 which broadcasts across Ireland. Dublin-based Trinity Venture Capital owns 18% of UTV. Of all media companies operating in Ireland at present, UTV looks like it has the healthiest earnings and financial standing. It owes some GBP 60m in borrowings but it is profitable at both operating and post tax and exceptional levels, and has net equity of over GBP 80m according to its latest accounts for H1, 2012.


British publisher, Johnston Press, publishes 12 regional newspapers in Ireland – Donegal Democrat, Donegal People’s Press, Dundalk Democrat, Leinster Leader, Leinster Express, Leitrim Observer, Longford Leader, Kilkenny People, Limerick Leader,  The Nationalist and Munster Advertiser, Tipperary Star and The Echo in Tallaght. Although Johnston also has a serious debt issue – its latest report for  H1,2012 shows it has borrowings of GBP 346m but has net assets of GBP 299m – its borrowings are not understood to be with Irish banks.


We also have the Alpha Newspaper Group controlled by Ulsterman, John Taylor. John is a former Ulster Unionist Party MP and MEP, and a man that would be considered a stalwart of Unionism. He now sits in the House of Lords in London where he known by his title, Baron Kilclooney. Alpha is a media company based in county Tyrone and it owns a number of local newspapers in Northern Ireland and a radio station. In 2004, John bought four local newspapers in the Republic. He reportedly paid €14m for the Midland Tribune, the Tullamore Tribune, the Longford News and Roscommon Champion. [UPDATE: 25th February, 2013. The Roscommon Champion was subsequently closed in late 2010]. Alpha was behind the Athlone Voice which closed in 2010. The group is ultimately controlled by Tontine Rooms Holding Company Limited where John and his wife Mary, own more than 50% of the shares. The latest accounts indicate the company is balance sheet insolvent, that is, that it has assets of GBP 34.1m and liabilities of GBP 34.3m. It is not known if the group has any exposure to Irish banks.

Above is not intended as a comprehensive review of Irish media, and there is a smattering of smaller “independent” media operators across the State, including the Connacht Tribune group – which encompasses The Connacht Sentinel, Galway City Tribune, the Connacht Tribune newspapers and Galway Bay FM) and the Southern Star (incorporating the Skibbereen Eagle), to name but two.

So in the media sector, we’re already lumbered with RTE, we’re heavily exposed to TV3, we have exposure to IN&M and are likely to be asked for a writedown, Denis O’Brien’s Communicorp is heavily indebted and is turning in modest losses. We don’t know if we are exposed to John Taylor’s Alpha group though we believe we’re not exposed to Johnston Press. But you can easily see, how in the next few months, we might end up bailing out the media sector and nationalizing much of it. And this is all happening under centre-right governments – even the Lefties mightn’t have been able to accomplish all this.

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I am sure there is new information in the Ronald Quinlan article in the Sunday Independent today about NAMA’s pursuit of Sean and Gayle Dunne through the US courts – it’s just unclear what it is.

As regards this week’s hearing where the feisty Gayle is described as looking “vulnerable”, there is little reference in Ronald’s report to the proceedings. But if any of you can decipher the sentence “While she [US judge] refused to remove a protective order preventing Mr McDonagh’s deposition a witness, she left it up to both sides to decide a date for McDonagh’s deposition” please let us know. Now I think that Ronald is trying to say something here. Despite RTE, the Indo and Irish Times who all had reporters in the Stamford court room this week, all reporting that the judge ordered that Brendan McDonagh be “deposed” – meaning present a statement to Sean and Gayle’s lawyers and allow himself be questioned by them – sources close to NAMA were disputing that such an order had been given. As of Friday this week, the judge’s written order is not on the US court system, PACER, so there might indeed be some obstacle remaining in Gayle’s path to have Brendan deposed, but we don’t know what it is, if indeed there is an obstacle at all.

However it is not the US court hearing this week, but the rejection of Sean Dunne’s business plan that the Sindo article contains most new information on, but even here it is distorted.

Sean is said to have been the 39th biggest NAMA developer by borrowings. But what were those borrowings? Ronald today claims that Sean owed €892m. Elsewhere he says Sean owed €538m to non-NAMA banks. Sean is said to owe €65-80m to Cork developer, Michael O’Flynn. We do know on here that NAMA obtained a €185m judgment from Sean. These numbers don’t seem to add up, though maybe Sean sold assets to pay off some of the debt. Who knows?

The Michael O’Flynn angle is odd. Ronald reports that Michael obtained a €65m loan from Irish Nationwide and gave it to Sean in 2006 to buy 65 acres of farmland in Kildare. Ronald claims that if Sean were to have succeeded in getting 70% of the 65 acres rezoned, then “the money would not be repayable [by Sean] to him [Michael]” Does this make any sense to anyone, or is Michael O’Flynn scouting the country trying to get lands rezoned on philanthropic grounds?

Ronald claims that when NAMA assessed Sean’s business plan, there were six reasons to reject the plan and only three to support it. So, what were the nine reasons, O Oracle?

I can’t find anything which would count as a reason for NAMA supporting Sean but this is my extraction and interpretation of the six reasons why NAMA rejected the plan (as with most crossword puzzles, I might be wrong, so don’t take this as Gospel)

(1) No need for additional office development in IFSC/docklands where Sean had property and sites. That was NAMA’s view in November 2010. After this week’s announcements, that assessment appears to have reversed.

(2) Sean wanted €196-275m to finish off his property, NAMA thought he only needed €28m

(3) NAMA would get €31m in rent over 10 years if it foreclosed against Sean

(4) Refusal of Gayle Dunne and three children from Sean’s first marriage to provide statement of assets. NAMA concerned about the €58m purchase of Walford, the crumbling Edwardian home on 2 acres on Shrewsbury Road. There were “reports” that Gayle was involved in the purchase.

(5) Sean owed €538m to non-NAMA banks (and what about Michael O’Flynn). Sean is said to have had €612m of net liabilities in his statement to NAMA.

(6) Ongoing litigation involving Sean Dunne

So, in the Sindo crossword today, we know that some clues are missing – reasons for NAMA to support Sean Dunne, for example. We may have misinterpreted other clues. And some clues – like whether the judge this week ordered that Brendan McDonagh be deposed, or what was to happen to the Michael O’Flynn loan if 70% of the 65 acres in Kildare were rezoned  – have stumped us completely. Maybe Ronald might publish the answers in next week’s edition…

UPDATE: 24th February, 2013. We have gotten our hands on the transcript of last Tuesday’s hearing which supports Gayle’s comment as to the deposition of Brendan McDonagh. In other words, there is no order that Brendan be deposed at this stage, but having deposed John Coleman, Gayle and Sean can come back to the Connecticut court to seek to depose Brendan, and the court will give Gayle and Sean a date to depose Brendan.


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