Irish Water plans to borrow €550m just weeks after a Ulster Bank deal
Irish Water will agree loans worth at least €550m from private-sector banks within weeks.
The utility has recently signed a €100m loan agreement with Ulster Bank – the first of a series of loan deals that could finally end Irish Water’s dependence on State funding. The troubled utility’s €100m commercial loan will be kept off the Government’s balance sheet because it is not guaranteed.
While the Ulster Bank loan is unsecured, Irish Water plans to refinance the loan with longer-term revolving credit from a syndicate before the end of the year.
THE UTILITY THEN INTENDS TO BORROW ON THE BOND MARKETS.
In November last, Irish Water agreed a €50m overdraft facility with Bank of Ireland that was also not covered by a Government guarantee.
Sources said credit approval has now been secured for another €250m from domestic and international commercial banks.
The utility is also understood to be in advanced discussions with two other international commercial banks for a further €200m of bilateral loans.
The banks involved in the talks include AIB, Barclays, BNP Paribas, BOI, Danske, HSBC, Ulster, Royal Bank of Scotland and Royal Bank of Canada.
An Irish Water spokesperson confirmed some aspects of the deal with Ulster Bank but would not comment on the interest rate the utility is paying.
Informed market sources said that the company is likely to have secured financing at very competitive rates of less than 1.75pc.
Irish Water’s model sees all short-term bilateral facilities rolled into a long-term syndicated loan by the end of the year.
The utility expects the next loan will be on a three to five year basis once Irish Water begins domestic billing.
Pre Election & nervous politicians shout down IAG’s Aer Lingus bid
The owner of British Airways ICAG.L is running out of time to secure Ireland’s Aer Lingus AERL.I as questions over its commitment to keep jobs and key Heathrow routes stoke opposition from politicians facing a tough election next year.
Aer Lingus’ board recommended the 1.36 billion euro (1.01 billion pounds) offer from International Consolidated Airlines Group ICAG.L (IAG) last month, subject to the agreement of the Irish state to sell its 25 percent holding.
Since then IAG has said it will maintain key landing and take-off rights at Heathrow, Europe’s biggest travel hub, for its Irish routes for five years. But that has failed to quell attacks from trade unions, opposition parties and government MPs, who want stronger guarantees and assurances about employment.
“If IAG are going to do something they have to do it very quickly if the entrenched positions people have been forced to take are to be unwound,” a senior government source told Reuters.
A year out from parliamentary elections the bid risks becoming politically toxic for the coalition government of Prime Minister Enda Kenny’s Fine Gael and Labour.
Polls indicate that the two parties will lose around half of their combined seats because of a series of austerity budgets that have fuelled the rise of left-wing Sinn Fein and a large group of populist independent candidates.
Transport Minister Paschal Donohoe, said on Friday Dublin was not yet convinced: Kenny has demanded “cast iron permanent guarantees” on flights to Ireland.
At a recent meeting of the Labour party, which is affiliated to the IMPACT trade union that has warned of 1,200 job losses at the airline, all of the 20 or so members who spoke on the issue opposed the sale.(Full Story) One source said it was likely some would seek a veto of the sale at the party’s annual conference later this month.
“We would still be of the view that the state should retain its share until we see something that would alter the situation,” Sean Kenny, a Labour Party MP in a constituency where Aer Lingus is a major employer, told Reuters this week. (Full Story)
Shares in Aer Lingus have fallen to 2.21 euros from 2.45 on Jan 26. when IAG made the 2.55 euro a share approach.
“RUNNING SCARED”
Had IAG’s Irish boss Willie Walsh made a bid for the airline back in September 2011, when Dublin first said it would consider selling its stake, the government might have bitten off his hand to get the money.
Just six months in office and grappling with the onerous terms of an EU/IMF bailout, it was under pressure to sell state assets, revive a crisis-hit economy and was watching yields on 10-year debt hover just below 9 percent.
But three and a half years on, the economy is growing faster than the rest of Europe and just last week Ireland sold 30-year debt at record low 2.1 percent.
However, say analysts and industry experts, the government may not get as good an offer again given pressure on the industry to consolidate. On top of that, while IAG may not be offering the exact guarantees that the state wants, Ireland’s government could see its influence entirely wiped out if IAG buys the remainder of the airline or if another carrier takes majority ownership.
The management of Ryanair, which is trying to sell its 30 percent of Aer Lingus, has been generally supportive of the bid in public comments. “It’s only a question of which parent or family it is going to join,” Ryanair chief executive Michael O’Leary said of Aer Lingus’ future last week.
Nonetheless, months from an election and bruised by mass street protests against the government’s recent attempt to charge for tap water, short-term political calculations are likely to guide the government. (Full Story)
“The government is running scared because they made such a balls of Irish Water,” said Liam Heron, an 80-year-old retired shopkeeper from Swords, a town near Dublin airport.
“With the election coming up the government are looking over their shoulders the whole time.
Ireland’s GPs call to reject free care for under-sixes
Doctors have been asked to reject the Government’s plan to give free GP care to under-sixes.
The National Association of General Practitioners has called on GPs to not comply with the scheme, saying that it is unfair to older children with chronic and life threatening conditions.
“Our problem with the scheme is that a seven-year-old who has cancer being unable to get a medical card, while a perfectly healthy six-year-old would be entitled,” said NAGP boss Chris Goodey.
Speaking on RTE’s This Week, he said that: “The starting point should not be the age of a child but rather their need. No child with a chronic or life-threatening disease should be denied a medical card.”
“With hundreds of patients on trolleys in our emergency departments every day, it is morally reprehensible to invest scarce funds into providing free care to those that do not have a genuine medical need,” he added.
In an email sent to the country’s 2,300 GPs this morning, the NAGP they had an “ethical and moral responsibility” to prevent the introduction of the scheme, believing that it interferes with guidelines from the Medical Council which state that doctors have a “duty to ensure efficient use of resources and their allocation.”
“In the interest of our patients and our duty as doctors, we have been left with no alternative but to recommend on a point of principle that GPs refuse to sign any contract providing free care to under-sixes,” the statement said.
The association is asking Health Minister Leo Varadkar to postpone the introduction of the scheme until more serious issues within the health service are resolved.
“We need to end the county’s two-tier health system that benefits the wealthier. In our capital, a north-side Dubliner will die seven years earlier than his south-side neighbour and yet the south side has one GP for every 1,600 people while the north side has one GP for every 3,000.”
Irish company leading the global revolution in online payments
Colm Lyon left a safe, permanent job at a bank to set up on his own – and has never looked back. Armed with nothing more than a good idea, a mobile phone and a laptop, he set out to create a new online payments business.
Payments, has offices in Dublin, London and Paris, employs 170 people and has an annual turnover of €20m.
His story is an inspiring one and proof of Victor Hugo’s adage: “There is nothing so powerful as an idea whose time has come.”
This week I visited Colm at his company’s headquarters on the third floor of the Observatory Building on Sir John Rogerson’s Quay, in the area of the city now referred to as Dublin’s Silicon Docks.
His is a cool, Google-esque type office space that looks out over the river Liffey and on to two of the city’s newest and iconic landmarks, the Convention Centre and the Samuel Beckett Bridge. There’s even a staff area called Craggy Island 2.0 with a full wall-sized picture of the Father Ted House.
“Simply put, Realex Payments provides the technology that enables large and small online businesses to accept payments from their customers,” explains Colm.
Now one of Europe’s most successful online payments businesses, the company processes a staggering €28bn in payments annually on behalf of their 12,500 customers internationally.
“Our customers come from a wide range of sectors that include insurance, airlines, online retail, gaming, telecommunications, financial services and even government services like motor tax payments,” explains Colm.
Among them are well-known brand names such as Vodafone, Aer Lingus, Virgin Atlantic, Paddy Power, AA Insurance, notonthehighstreet.com and boohoo.com.
While the UK currently accounts for 60pc of its turnover, the company has customers in more than 30 different countries around the world. They have also partnered with a number of international financial services firms such as Global Payments and Santander Elavon Merchant Services and many other institutions across Europe are also distributing their services under their own brand labels.
It’s been an exciting journey so far for Colm and his company and one which shows no signs of slowing down.
Colm grew up in Clontarf in Dublin. He got his first taste for business while in his teens. Each morning before school, he and his five brothers would deliver morning newspapers to houses in the area.
Apart from the money he made, he also made a number of important contacts. One of those was a neighbour who would eventually become a trusted mentor and friend. His name was John Teeling, himself a well-known entrepreneur and at that time, a lecturer in Commerce at UCD.
After what he jokingly calls a “practice run” at the Leaving Cert, Colm decided to repeat the year and with the encouragement of his new mentor, secured the points he needed to pursue his dream of studying commerce in UCD. His dream was achieved when he later graduated with a BComm as well as a master’s in management science.
Even with his newly acquired qualifications, Colm found it difficult to find work. Unemployment was high in Ireland at the time and most of his friends and family had emigrated in search of work. After 18 months of sending out CVs, persistence paid off when he was offered a three-month contract with Ulster Bank.
“That three months turned into 14 years,” explains Colm who eventually ended up becoming head of central IT for Ulster Bank markets. But the desire to start his own business never faded.
“While working in the bank, I found myself becoming increasingly frustrated at the pace at which things were happening,” admits Colm. “The internet had come along and the whole world was starting to go digital. I knew the problem of online payments would be one that would soon need to be solved,” he adds.
He began to study the market and as he did, he became increasingly aware that more and more retailers were contacting the bank looking for a solution as to how to accept payments online. But the banks didn’t really have a solution.
“I quickly realised that someone needed to create a gateway to link the retailers to the banks. The simplicity of the business model just made complete sense to me,” insists Colm.
In the middle of 2000, he decided it was time to strike out on his own. He left the bank and, along with John Mooney, a friend from UCD, set up Realex Payments. No longer involved in the operational side of the business, John now works as an academic in California, but remains a non-exec director.
Colm was later joined by a former bank colleague, Owen O’Byrne, and together the pair set about designing and developing the first version of their new online payments system.
By March of the following year, they had secured that important thing that all new entrepreneurs desire most – their first customer. And by the end of the same year, over 20 businesses were using their system.
However, raising money to fund the growth of the business proved even more challenging than winning their first customer. Firstly, a VC firm almost invested. Then a high net-worth business angel was close to putting up money but the deal never got across the line.
“It was a month before the Nasdaq crashed and the dot-com turned to dot-bomb,” explains Colm.
Frustrated but more determined than ever, Colm turned to his suppliers and asked if they might consider providing their services free, initially, in order to help him get the business established. These included providers of computer hardware, firewalls, hosting, and software, as well as office space, legal and accounting support. To his surprise, most agreed. It is something he has never forgotten.
“Today, people call this a ‘lean’ approach. For us it was simply survival and perseverance,” he admits. “When you have no money and you can’t manage to raise it, you have to learn to ask for help.”
At the end of 2001, the business did manage to raise €320,000 by way of BES funding from a mixture of family and friends. It would turn out to be the only capital raised by the business.
As we continue to talk, one of the things that strikes me is how strategic a thinker Colm is. He talks about strategy, company culture, building capability and core values. I am not surprised to hear that in 2008 he attended Stanford Business School as part of Enterprise Ireland’s Leadership 4 Growth programme.
“Up to that point we weren’t growing at the rate we knew we were capable of,” he admits. “Many companies get to the €2m-€3m mark quickly but struggle to push beyond that. That’s when you need to focus more on strategy.
“Entrepreneurial drive gets you started but as you begin to grow and scale, you have to start developing processes for managing your business and people. In essence you have to become a better leader.”
The following year, he set up The Realex Academy – an in-house staff development programme which has now become an essential part of each new staff member’s training and the place they first learn about the company’s values of passion, innovation, security, delivery and service.
Colm has also brought his focus on strategy to life in the company’s physical environment. A series of ‘ring forts’ are located around the office, a concept developed by Colm, himself. These tall circular walled structures are where teams hold their short stand- up meetings every morning and where they go to brainstorm on possible solutions to challenges as they arise.
Called after ancient forts in Clare, and with names like Caher Mor and Caher Connell, they are entire whiteboard spaces where people write up ideas and suggestions on the walls to be discussed and developed with team members.
“The idea is that everyone is encouraged to leave their judgment outside. Here they are free not to be constrained by where we are today but are encouraged to envisage instead, where we might be tomorrow. It’s about creating a space where people can be free to come up with new solutions,” explains Colm.
“We have 22 different nationalities working in the business and the average age of them is 29. Some are leading teams of 30 and 40 people. For that reason, we constantly look to attract, develop and retain the very best staff. We want people who are not happy with the ordinary and who want to excel in whatever they are doing,” he insists.
Looking to the future, Colm sees a new generation of payment concepts emerging.
“How does it make sense that, when you buy something, you have to take out your credit card, give it to the retailer, who swipes it though a device, and then ends up getting less than you paid them and has to wait three or four days to get their money,” he says. “It’s a dated model, technology has moved on.”
His vision of the future is about enabling payments to be made directly from a customer’s account to the retailer’s account. To this end he has set up a new company called Realex Fire and has already launched a free mobile payments app for the UK and Ireland, with more products to be launched in the near future.
Like most successful entrepreneurs, Colm wants to make a difference – he wants to change the way we pay for goods and services and improve that process for customer, retailer and bank. Full of energy, exploding with ideas and bubbling with passion, Colm exudes the essence of a successful entrepreneur.
Having spent the morning with him and his team, one thing is certain: both he and Realex Payments are set to achieve even greater success.
Man too busy texting misses a whale under his nose?
Technically Incorrect: It isn’t every day you see a humpback whale. You won’t see one at all if you’ve always got your nose in your phone.
For those attuned to certain values, it’s an image that defies belief and defines how far modern culture has sunk.
There is a man on the deck of a sailboat. Just feet below is a humpback whale. Perhaps the whale is saying hello. Perhaps the whale can smell some nice fish the man has grilling. It’s less likely that the whale wants to phone home.
The glory of the story, you see, is that the man can’t see the whale, because he’s too busy texting on his phone.
The image was taken by photographer Eric Smith and posted to his Instagram feed, where some are suggesting that the shot is faked.
Smith, though, told ABC News that he took the shot during a whale watch at Redondo Beach, Calif.
He said: “A small private sailboat maneuvered really close to the whales, and this guy on it was literally sitting in that position and never moved.”
Though it’s easy to suggest that the man must have been a sad slave to his screen, even Smith admitted that there could be other possibilities. He said: “He could have been texting his mom in the hospital for all I know.”
Quite. Or he could have been dumped by his callous lover and was composing a last, languorous haiku in order to win her back. He could have been texting about a job, a debt or a coming fortune.
He might have seen the whale earlier and they’d had a nice chat before he had to explain that he had to get on, as his girlfriend was wondering where he was.
He might even have already taken his own picture of it and was now posting it to his Instagram account.
The camera never lies. Oh, but it tells fibs all the time.
Clearly, many people are so deeply embedded in their phones that they seem barely to notice real life at all. They fall into fountains while texting. They fall into Lake Michigan too. It’s even been known for a texter to fall off a cliff.
Perhaps, when this man sees the picture all over the world, he might come forward to tell us what was really happening.
