The company that owns motoring and financial services provider AA Ireland has reported a €2 million fall in annual revenues to €62.4 million, as lockdowns and travel restrictions hit its operations.
Erbium, into which AA's insurance revenues, roadside breakdown operations and other services are consolidated, reported a loss of €4.9 million in the year, according to accounts recently filed. The group was bought during the year by Further Global, a US private equity fund led by former French president Nicolas Sarkozy's half-brother, Olivier Sarkozy.
The accounts show that Further Global, which bought out previous owners Carlyle Cardinal Ireland Fund and Carlyle Global Financial Services Partners in a deal worth about €240 million, pumped €40 million into Erbium in fresh equity. The investment was used to help pay off loans to the previous owners of €53.5 million. The group's bank debts, meanwhile, were hiked to almost €99 million as part of the buyout.
Testing centres
In a note attached to the accounts, Erbium’s directors say pandemic lockdowns drove down revenues by shutting AA Ireland’s roadworthiness testing centres. It also drove down demand for travel insurance products sold by the group, while its breakdown service was used less frequently because there were fewer cars on the road.
The group, which employs about 500 staff, has accumulated losses of about €26.8 million on Erbium’s balance sheet.
Prior to the AA deal, Mr Sarkozy was already prominent in Dublin’s business community for being part of the Mallabraca group of private equity investors that examined taking a stake in Bank of Ireland at the outset of the 2008 financial crisis.
Further Global has already started to tweak AA Ireland’s operations, having earlier this year shut down the AA Roadwatch service which provided traffic reports and bulletins to Irish radio broadcasters.
