Goodbody clients get back almost half of telecoms investment

A consortium of Goodbody stockbrokers' private clients and a fund led by Tony Killarney, the telecoms entrepreneur, have salvaged almost half of their original investment from a top-of-the-market deal to buy a network of telecoms masts.

The investors will recoup about €22 million after Irish Infrastructure Fund (IIF), a State-backed fund, agreed to pay €120 million for TowerCom Holdings, which owns the network of mobile phone masts across the country.

While the investors lost 55 per cent, market sources pointed out that other recent deals for companies originally leveraged during the boom, such as at Siteserv, have seen almost all of the equity wiped out.

The Goodbody clients had about 88 per cent of the equity in the TowerCom deal, while Mr Killarney's Threefold Project Management held the remaining 12 per cent. It is understood that Plainfield Asset Management, a US group that was part of the consortium that originally bought the masts network alongside the others in 2007, sold out to the other shareholders earlier this year. It had owned 10 per cent of the equity.

A consortium of banks, led by AIB and including Bank of Ireland and Japanese institution Mitsui, was repaid over €90 million from the deal.

IIF, a €1 billion fund created by Irish Life Investment Managers and run by Sydney- based AMP Capital Investors Ltd, entered exclusive talks last month to buy TowerCom, according to sources who did not want to be identified. An accord may be announced within weeks, they said.

Antenna facilities
TowerCom bought Eircom's mast business in 2007 for €155 million. The company earns fees from providing radio antenna facilities for mobile companies. Eircom and Vodafone are its biggest customers, according to TowerCom filings.

A memorandum issued by Goodbody at the time of the original deal said about 80 per cent of its revenues came from Vodafone. At the time, it was generating more than €10 million a year in revenues.

Irish Infrastructure Fund, established in 2011, made its first investment a year ago by buying a majority stake in 104 megawatts of wind arm projects from Viridian. The National Pensions Reserve Fund is the fund’s biggest investor, having committed €250 million. TowerCom’s banks weren’t prepared to allow more time for its loans to be repaid, having extended a five-year facility for 12 months in September, it said in a letter to investors last month, according to sources. – (Additional reporting: Bloomberg)