ILP investor's legal gamble; rapid turnover at Dublin hotels; accountants look to Africa; aviation leasing firm doubles its fleet, writes CIARAN HANCOCK

Bunting's tilt at ILP may be long shot

THIS WEEK marked the first challenge against the Government’s far-reaching banking legislation taken by an individual.

The previous cases taken under the Credit Institutions (Stabilisation) Act, which was fast-tracked into law last year, were launched by hedge funds trying to stop the Minister for Finance inflicting losses on AIB’s subordinated bondholders.

English investor Nigel Bunting, along with an unconnected fund (curiously) registered on the Caribbean island of Curacao, are trying to reverse the court order secured by the Minister last month to inject €2.7 billion into Irish Life Permanent against the wishes of shareholders.

Bunting, who is based in Ipswich, Suffolk, told us that he was “very upset” that his interest in ILP was being diluted by more than 99 per cent.

He’s not the only one.

The only recourse open to him was to initiate a legal action within five days of the “expropriation” taking place, he said.

Bunting stressed that he was an “individual shareholder” and had no connection with the dissident shareholder group led by Malta-based hedge fund Scotchstone and its managing director, Piotr Skoczylas.

Bunting confirmed that he had about three million shares in ILP, having invested “over a period of several months during 2011”. He was one of eight shareholders (along with Liberal Democrat MP John Hemming) represented by lawyers who attempted to extract a settlement of 90 cent a share from the Government – compared with the market price of 4 cent – in settlement of their grievances.

Bunting attended ILP’s heated egm in Ballsbridge last month where shareholders shot down the company’s proposals to accept the State’s recapitalisation.

He may have to visit Dublin many more times when his case kicks off later in the autumn.

His action appears to be something of a long shot as there is no evidence that the Irish courts will oppose the Minister’s action. In which case, he may end up writing a rather large cheque to his legal team.

CPA wins contracts worth $1.5m in Africa

WITH STUDENT numbers declining in the recession, the Institute of Certified Public Accountants in Ireland has turned its sights to foreign fields to diversify its revenue streams.

The institute, which has about 4,000 members here, has just won two contracts in Africa from the World Bank, in partnership with outsourcing group Kosi Corporation, beating off competition from peers in larger countries.

It will advise on the development of the profession in Rwanda and Mozambique.

In Mozambique it will focus on setting up a new national accountancy body. A handful of staff will be deployed to the two countries.

Combined, the contracts are worth $1.5 million for the CPA and the Kosi contracts will last from 15 to 24 months.

It is significant when you consider that CPA’s annual revenues are about €4 million and it generates a surplus of about €300,000 a year.

“This is a first for us,” CPA chief executive Eamonn Siggins told me this week. “It’s a diversification where we are looking to leverage our corporate governance and exam framework structures.”

The CPA is also in the frame for a similar contract in Liberia, Siggins said. Its student intake has fallen by about 30 per cent since 2008. “The attractiveness of the profession is probably not what it was at the height of the boom.”

Siggins said Ireland’s tarnished financial reputation abroad and the collapse of our banks, which in turn has lead to questions being asked about the role of auditors in the credit boom, did not weigh against the CPA in the beauty parade.

“It didn’t impact on us in any way. The profession here is still held in high regard.”

Changes at the top in hotel sector

RECENT WEEKS have seen some interesting movement among the senior ranks in the Irish hotel sector.

Bill Walshe has checked out of the Doyle Collection, where he was chief executive since moving home from Dubai in 2007. Walshe left in mid-July and the CEO role is being filled on an interim basis by finance chief Patrick King, who started his working life with the group as a waiter in the Coffee Dock of the old Jurys hotel in Ballsbridge.

I’m told that a recruitment process is under way to find a replacement for Walshe. The Doyle Collection grew out of the old Jurys Doyle listed company and has upmarket hotels in Ireland, London and the US. A spokeswoman for the hotel chain said its UK and US properties were “performing strongly” but trading in Ireland was “tough” at present.

In July, the Labour Court issued a recommendation in relation to a dispute over proposed redundancies and pay cuts at the five-star Westbury Hotel in Dublin.

The company argued that the hotel was loss-making and sought €800,000 in staff cuts. Unions disagreed and said any losses were the result of debts imposed on the business by its owners. The Labour Court accepted the company’s arguments.

Meanwhile, across town, John Clifdon has left the Burlington Hotel, where he was general manager for its operator Tifco, and has taken over at Seán Dunne’s D4 hotels in Ballsbridge.

It will be interesting to see if Clifdon will bring any changes to bear at the former Jurys and Berkeley Court properties, which advertise rooms for as little as €69 a night.

Clifdon’s arrival in D4 is very recent. I couldn’t reach him by phone yesterday and when I asked for an e-mail address, I was told an account hadn’t been set up for him yet.

Barrington deal gives Fly new lease of life

DUBLIN HAS become something of a hub for large global aircraft leasing businesses over the past two decades, in part a legacy of Tony Ryan’s GPA in Shannon.

This week, Dún Laoghaire-based Fly, which is led by Aer Lingus chairman Colm Barrington, announced a significant deal to acquire 49 planes from Global Aviation Asset Management in Australia, which were valued at $1.4 billion.

This will bring its fleet to 109 aircraft and values Fly’s portfolio at about $3 billion.

Importantly, Fly does not have to issue new equity or source additional debt to conclude the transaction.

Fly said this would boost its annualised revenues by about 80 per cent to $370 million and bring its fleet of leased aircraft to 109.

“We don’t see why it won’t have the same sort of [percentage] impact on out net income and earnings per share,” Barrington told me yesterday.

Listed in New York, Fly is connected to BBAM, which in turn was spun out of Babcock Brown via a management buyout last year. Barrington is seconded to Fly by BBAM.

The aircraft acquired are all leased out to airlines, including BA, Air France and Qantas. Some are leased to Ryanair, an irony that won’t be lost on Barrington who is also chairman of Aer Lingus.

Barrington said Fly will look at other potential deals. He didn’t rule out some involvement in the sale process that has begun for RBS Aviation, another big global lessor based in Dublin, although a solo run is unlikely.

“There are potential partners out there whom we could work with,” he said. “There’s always the potential to do something. We’ll be having a very serious look at that. We want to show more growth.”

Little things

Audi Ireland appears to be handling the recession well. Its sales revved up by 22.4 per cent in the first six months of this year in spite of the economic speed bumps.

That equated to an additional 492 vehicles being sold, possibly assisted by the Government's car scrappage scheme ending on June 30th. Its market share shifted up marginally to 3.36 per cent.

Its German parent, meanwhile, reported a record operating profit for the half year, with it almost doubling to €2.5 billion.

Its profit margin moved up a couple of gears to 11.8 per cent in the period from 7.6 per cent last year.

Ryanair's Michael O'Leary makes many valid points about the state of the Irish travel industry but his prediction traffic through Dublin airport would decline again this year is not being backed up by the figures.

Statistics released late yesterday show traffic through the airport rose by 1 per cent year on year in July to just over 2 million. Year to date, more than 11 million passengers have passed through, a 5 per cent rise on the same period of 2010. Transatlantic traffic grew by 8 per cent in July, a spin-off presumably from US Airways operating a new service to Charlotte.

An interesting notice on the e-tenders website has Fás seeking to hire an "investigator into Safe Pass non conformances". This could include looking at possible "legislative breaches".

Safe Pass was a health and safety programme operated for construction workers and was in the headlines some years ago for breaches in the way it operated. Is there more bad news on the way?