Apollo pulls ahead in race to acquire Arnotts’ €230m IBRC debts

A private equity investor is close to acquiring a €230 million group of loans owed by Arnotts, the leading Dublin department store, to IBRC, the former Anglo Irish Bank.

Apollo Global Management is understood to be in final negotiations to acquire the debt at a price said to be about 40 cent in the euro of the face value of Arnott’s debt. A spokesman for Apollo declined to comment.

Apollo is a New York-based alternative asset management firm with $113 billion under management. It is advised in Ireland by Brian Goggin, the former Bank of Ireland chief executive and internationally it has a long history of investing in retail and consumer brands.

In Ireland it has already a big investor. In May 2012 it acquired the Irish credit card portfolio and operating assets of the Irish unit of the MBNA Europe subsidiary of Bank of America based in Carrick-on-Shannon. In January 2013, it bought a €1.8 billion portfolio of Irish commercial real estate mortgage loans from Bank of Scotland, among other transactions.

Beaten
Fitzwilliam Finance Partners Investment Ltd, an investment vehicle owned by Noel Smyth, and Selfridge's, the retail group owned by Canadian billionaire Galen Weston, were beaten at the last minute by the private equity group after IBRC special liquidator KPMG reviewed the price and conditions attached to the bids. Fitzwilliam/ Selfridge's last week bought a €140 million loan owed by Arnotts to Ulster Bank.

Meanwhile a loan of €200 million owed by the Racing Post, the racing newspaper and website, is to go into the National Asset Management Agency after bids submitted to the liquidator of IBRC failed to reach its reserve price. FL Partners, the incumbent owner of the title, had been hotly tipped to acquire its own loan from the former Anglo Irish Bank but failed to meet the threshold price set by liquidator KPMG and its advisers. FL Partners is likely to submit a new bid for its loans to Nama next year.

Other tranches
The Dublin private equity firm did, however, succeed in acquiring two other tranches of its loans. The first relates to its acquisition of bed-maker Kaymed in 2007. Neil Hughes, a partner with FL, said: "We are delighted to have secured the 200 jobs employed in Kaymed which is an important Irish manufacturing and exporting business."

It is understood that FL Partners was also successful in acquiring personal loans owed by its partners to the former Anglo Irish Bank.

Finally it emerged yesterday the sale of corporate debt relating to TV3 to private equity firm Doughty Hanson saw a so-called 'B Note' debt of €81 million written off in its entirety. This €81 million loan had been parked by Anglo Irish Bank in 2009 after a complex restructuring agreed with TV3. Doughty Hanson bought TV's remaining debt of circa €60 million at a discount. TV3 declined to comment.