Former Woodchester bankers involved in USIT takeover
The former Woodchester bankers Mr Michael Tunney and Mr David Andrews are the investors who have taken over USIT Ireland Ltd along with Dublin finance house Ion Equity. The two, along with Mr Neil O'Leary, chief executive of Ion Equity, will form the board of the company, which trades as Usit Now.
The company is emerging from a period of examinership and the High Court has set an effective date of June 17th for the investors to take control. The same date has been set for the same group to take over an associated technology company, Usit World.com.
The investors are making a cash injection of €2.5 million into the business and have guaranteed a further €2.5 million in bank finance facilities.
Mr Tunney is the new executive chairman of Usit Now and has begun work on reviewing internal structures within the company. A new managing director, who has experience in the travel sector, is expected to be appointed shortly.
Mr Tunney said the investors were taking a conservative view of the business and expected no growth this year. "The business and the staff have just been through a very difficult period." However, he sees "significant potential" for the company down the line. The firm remains profitable and has been profitable over the years. It funded the growth of USIT into an international group before its collapse following the September 11th attacks last year.
Usit Now has travel and accommodation operations. It also owns the buildings from which it operates on Aston Quay and College Green, in Dublin, and accommodation it runs near Christ Church, Dublin; in Shandon, Cork; and Eyre Square, Galway. It plans to sell the College Green building, which formerly acted as headquarters for the USIT group.
Mr Tunney said he had been aware of details of the USIT business for some time and, when the group collapsed, was immediately interested in acquiring its Irish operation.
"I always thought the Irish business was a great business but I didn't feel the same about the rest of it. USIT is a great brand, known to everyone who ever went to university. It has been making money for donkey's years."
His priority now is to sort out the internal systems within USIT and establish a clearer picture on the finances of its various elements. The travel part of its business has a turnover of approximately €50 million, while its accommodation operation has 500 beds and a turnover of approximately €5 million. He would not disclose the company's profits.
One development he is considering is developing accommodation abroad for people travelling from Ireland with USIT. He also intends growing the non-student/youth element of the travel business, while maintaining the company's involvement with students, young people and the Union of Students in Ireland.
The company has 14 outlets in Ireland and employs 300 people. He does not foresee any closures or lay-offs. "We want to get on top of the business and then start adding to it."
The consortium taking over the business included former Budget Travel chief Ms Gillian Bowler at one stage but she withdrew because she was unhappy with the arrangements being put in place with USIT's main supplier, Aer Lingus. Mr Tunney said he was pleased with the outcome of the negotiations with Aer Lingus.
Mr Tunney left GE Capital Woodchester around the time it was taken over by Investec Bank. He and his business partner, Mr Andrews, now run about 15 corporate investments as well as property investments here, in Northern Ireland and in Britain. He said he believed his experience as a banker was very useful for assessing risk when making investments.