A NUMBER of executives at Ballsbridge-based stockbroker Merrion Capital are expected to leave the business in days as part of a major restructuring of the company’s shareholder base.
It is understood that interim chief executive and head of finance Michael Hodson; executive director Adrian O’Carroll; chairman Ray Curran; and head of institutional equities Enrique Curran will leave the business.
It is believed this will involve a distribution of a large chunk of the €35 million in cash and other assets on Merrion’s balance sheet.
John Conroy is expected to resume his role as chief executive of the business, having stepped down recently to take over its corporate finance arm. He will also become a large shareholder in the new structure.
Mr Conroy had run Merrion since it was founded in 1999 until announcing plans earlier this year to acquire a 50 per cent stake in the stockbroker’s corporate finance arm along with other members of that unit’s team.
Under the new structure, Shane Nolan is set to become head of stockbroking at Merrion, while Rose McHugh will take charge of its corporate finance division.
It is not clear if New York-based investment bank Allen Co, which is a shareholder in Merrion, will participate in the restructuring.
The business is expected to be slimmed down, with a redundancy package likely to be offered. Merrion employs about 80 staff.
The new management team is expected to reshape the institutional equities business, which has found the going tough in the current difficult economic climate. It is also expected to retain its asset-management activities.
Details of the restructuring are expected to emerge in the coming week.
This follows a recent strategic review. The options considered included a trade sale and a closure of the business, with its funds being distributed to shareholders.
Management at Merrion only bought the business back in late 2008 from troubled Icelandic financial group Landsbanki Islands. No sum was ever disclosed but reports at the time suggested that Merrion’s management paid close to €30 million for Landsbanki’s 84 per cent stake in the business.
This represented a steep discount on the €90 million the Icelandic group has paid since 2005 to acquire shares from Merrion’s founders and other equity holders.
Merrion recorded pretax profits in 2007 of €25.5 million. However, its profits declined sharply following the collapse of global financial markets and the onset of recession in Ireland.
Merrion made a pretax profit of €8 million in 2008, according to company filings. This is believed to have declined to about €6 million last year, which would be considered a strong result in a difficult market.
Merrion’s sale to Landsbanki involved an upfront payment and three additional payouts over a four-year period. However a final payment of €20 million was never made as the Icelandic bank collapsed.
