Avolon lands €300 million equity investment deal, Chiswick Moran Hotel lands in the red and Emirates not interested in any Aer Lingus landings
Bewleys deal still a drag on Moran
ACCOUNTS FILED for the UK hotels owned by Irishman Tom Moran (right) and his family indicate that the legacy of their €570 million takeover of the Bewleys hotels in 2008 continues to weigh on the group.
Chiswick Moran Hotel Ltd, which runs a property in west London, made an operating profit of £2.15 million (€2.44 million) in the year to the end of January 2011.
But interest payments of £2.4 million and a tax charge of £384,251 dragged it into the red.
The auditors highlighted in their report that it had net current liabilities of £29.7 million but did not qualify the accounts.
In Leeds, accounts for the Bewleys hotel there tell a similar story. Sweet St Hotel Ltd made an operating profit of £1.2 million in the 12-month period but interest payments of £2.5 million dragged it into the red.
It finished the year with a loss of £1.2 million.
Segal Trading Ltd, which operates the Crown Moran Hotel in London, made a loss of £1.5 million and had net liabilities of £40.99 million. But that didn’t stop the Morans adding 30 rooms to expand the property.
Its hotel in Manchester, Airport had net liabilities of just shy of £1 million, according to accounts for Ringway Hotels (Holdings) Ltd.
The Leeds hotel closed the year with a net debt of £197.8 million – a legacy of the Bewleys deal.
The Bewleys deal was struck just as the Celtic Tiger was about to draw its last breath.
Pat Power, finance chief at Moran Bewleys Hotels, told me yesterday that they had no regrets about the deal. It was just a case of bad timing.
“We have a good working relationship with our bankers and they are happy with out operating business.”
Avolon completes €300m equity deal
AMID ALL the noise around the euro zone restructuring that was being hammered out in Brussels, Irishman Dómhnal Slattery was landing a $300 million equity investment from the Government of Singapore Investment Corporation for his 18-month-old aircraft leasing business, Avolon.
It was announced yesterday but had been cooking for some time.
The funding would be a coup at any time but particularly now, given the global financial crisis and Ireland’s poor image abroad with lenders – and GIC is a heavy hitter.
This investment will give the Singapore fund just under 20 per cent of Avolon and dilute the holdings of the other major shareholders – Cinven, CVC Capital Partners and Oak Hill Capital Partners.
Slattery told me yesterday that the new funds would be used to support Avolon’s growth – he is planning a near doubling of the fleet size to 150 by 2014.
“We will just continue to grow the business to get to the target of the $6-6.5 billion of assets,” he said. “All of that equity capital will go into investing in aircraft and growing the core business.”
It’s not tied in to GIC’s investment but Avolon has plans to open an office in Singapore and to increase its exposure to Asia Pacific, where the aviation market continues to grow. “Our plan is to grow that to at least 50 per cent [of our business] in the next two to three years,” he said.
Closer to home, Avolon will be hiring in the new year for its Ballsbridge head office, where it currently has 34 staff.
“I don’t know exactly how many but we will add more people next year and we remain absolutely committed to Ireland.”
It’s not all gone Slattery’s way of late. Avolon was excluded recently from the sale process for RBS Aviation Capital, which is also based in Dublin. This was a business that Slattery founded years ago before selling it on to RBS. Last year, he poached some key staff for Avolon.
Why was he excluded?
“You’re going to have to ask them that. Don’t know why, don’t care. If you’re precluded from any club you’re disappointed but it’s not entirely relevant to Avolon. We’re growing organically and it was never our plan to grow by acquisitions of other companies.”
Emirates not interested in Aer Lingus
IT LOOKS like Minister for Transport Leo Varadkar can scratch Emirates off his list of potential buyers for the State’s 25 per cent stake in Aer Lingus.
Abu Dhabi airline Etihad might be interested in buying the shares but Dubai rival Emirates appears cool on the idea of investing in Aer Lingus.
On foot of a question I posed this week, a spokeswoman at its Irish PR agency Grayling said: “I can confirm that Emirates has no interest in acquiring a stake in another airline, but, rather, is focused on its own activities and growth.
“Its interest in Ireland is the launch of its new route from Dublin on January 9th, 2012.”
At home with B of I backer Wilbur Ross
WEALTHY BANK of Ireland investor Wilbur Ross – he owns 9.32 per cent of the bank and was part of a consortium that invested €1.1 billion to keep it out of State ownership – certainly keeps exclusive company in his spare time.
The latest copy of the New Yorker magazine recounts a recent cocktail party hosted by Ross and his wife, Hilary Geary Ross, at their penthouse apartment overlooking Central Park in the Big Apple.
It was in aid of Accion, a microfinance organisation chaired by Diana Taylor, the former state superintendent of banks and the “significant other” of New York mayor Michael Bloomberg.
According to the magazine, the Rosses’ apartment features a “wraparound terrace with an outdoor fireplace and, in the reception room, . . . a barrel-vaulted ceiling that has been papered in silver”.
A number of guests are said to have expressed their admiration for the Rosses’ extensive collection of works by Belgian artist Magritte.
“Beautiful apartment,” Vikram Pandit, the chief executive of Citigroup and the guest of honour, is quoted as having told Ross.
“If I need a mortgage to expand it, will you give me one?” replied Ross.
No point in Ross going to Bank of Ireland, I suppose. Sure everyone knows they’re not lending.
Rare bird that is David Drumm
IT SEEMS that the number of hits on the Irish Rare Birds Committee’s website has soared in the past week or so.
A large number of former Anglo Irish Bank customers are having trouble typing the bank’s catchy new name, Irish Bank Resolution Corporation, into their internet browsers with the result that they are being redirected to the committee’s website.
With the grey partridge having been repatriated to north Dublin this week, perhaps the committee could advise Anglo – sorry the IBRC – on how it might entice the lesser spotted David Drumm to return to these shores.
LITTLE THINGS
MANY CORPORATE sponsorships might be pet projects of a company’s chief executive or chairman but that’s not the case with Bord Gáis’s deal this week with Live Nation for the naming rights of Dublin’s Grand Canal Theatre.
Bord Gáis chief John Mullins stressed to me that the deal was purely a hard-nosed business decision, based on the potential for the semi- State to leverage the 400-odd shows that the venue will host every year.
Is he a fan of panto?
“I’d go to the odd one all right, yeah, when my wife orders me to go,” Mullins said. “Otherwise I wouldn’t be known for my theatre-going. This is not a pet project of the CEO I can tell you. I just recognise it’s got value.”
A unique feature of the sponsorship is that Bord Gáis will become the dual fuel supplier to the theatre and the nearby O2, which is also run by Live Nation and Harry Crosbie. Mullins said this would be worth €500,000 a year to the energy company.
“It’s multi-faceted, it’s not just around the naming rights.”
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Just days before Dublin was battered by torrential rain, a subsidiary of Swiss Re Capital Markets based here placed €180 million of risk notes covering European windstorm events.
Calypso Capital Ltd, a special purpose vehicle registered in Dublin, issued the notes, which provide cover for windstorms in Belgium, Denmark, France, Germany, Ireland, Luxembourg, the Netherlands, Norway, Sweden, Switzerland and Britain. The timing was certainly apt.
