State-backed fund takeover of Enet adds twist to broadband process
Irish Infrastructure Fund to buy remaining stake in former broadband bidder
The Department of Communications insists the lead equity bidder has been a Granahan McCourt-controlled entity from the outset of the procurement process. Photograph: Michael Smith/Getty Images
The fund, which is backed by the State’s Ireland Strategic Investment Fund and managed by Australian investment company AMP Capital, said it had entered an agreement to acquire the remaining 22 per cent of Enet from US investment fund Granahan McCourt. Financial details of the deal were not disclosed.
Granahan McCourt has recently taken over from Enet as the lead bidder in the Government’s broadband tender, while Enet has been downgraded to the role of supplier.
The changing composition of the lead consortium combined with the infrastructure fund’s acquisition announcement adds another layer of complexity to the Government’s already-strained broadband process.
The Irish Infrastructure Fund acquired 78 per cent of Limerick-based Enet, which operates the State’s Metropolitan Area Networks, in August 2017 in a deal that valued the company at up to €200 million.
Earlier this year the firm was left in pole position to win the Government’s national broadband contract, said to be worth more than €500 million, following the high-profile exits of Eir and ESB-Vodafone joint venture Siro. However, it is now acting as supplier to the Granahan McCourt bid.
Lead equity bidder
The Department of Communications, which is managing the tender, insists the lead equity bidder has been a Granahan McCourt-controlled entity from the outset of the procurement process.
Minister for Communications Denis Naughten is, however, facing calls to explain the context of a meeting he had with Granahan McCourt chairman and founder David McCourt in New York last July while the procurement process was ongoing.
It has also emerged that Granahan McCourt is being sued for breach of contract by Cube Infrastructure Managers, which was originally lined up to buy Enet.
“Today, Granahan McCourt are pleased to be putting our full and absolute commitment behind the Irish Government’s National Broadband Plan,” Mr McCourt said.
He said his firm has led the consortium since the pre-qualification questionnaire was submitted in March 2016.
“As we are now looking ahead to delivering the NBP and in order to fully commit our time, energy and resources to this ambitious project, we have taken the decision to sell our remaining stake in Enet,” he said. Granahan McCourt paid a reported €43 million for Enet in 2013.
Beset with problems
AMP Capital’s Philip Doyle, principal of the Irish Infrastructure Fund, said: “Since we acquired a majority stake in the business in August 2017, the company has demonstrated the high quality of its business and its potential for growth.”
“Enet, via its operation of vital telecoms infrastructure, has developed a great business that is both commercially focused and policy supportive,” he said. The transaction is expected to close after the necessary regulatory approvals.
The State-subsidised plan to bring high-speed broadband to more than 540,000 rural homes and businesses has been beset with problems since it was first announced in 2012.
The final consortium left in the process was originally led by Enet and included Scottish utility SSE and logistics giant John Laing. In July, SSE pulled out while last month John Laing exited, both without explaining why.