Tough new banking rules will increase borrowing costs for the Republic’s aircraft leasing industry, a conference heard on Thursday, the Irish Times reported. Proposed Basel IV reforms of the rules governing how banks manage their risks are likely to make it more expensive for lenders to provide cash for assets such as aircraft and ships. In a discussion at the Global Airfinance Conference in Dublin, Stephan Sayre, managing director of aviation investment management at DVB Bank, said it was too early to assess the exact impact of the proposed change.
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Ireland
Finding a resolution to the problem of unsustainable losses at Bus Éireann is a matter for management and trade unions, Minister for Transport Shane Ross has indicated, the Irish Times reported. He told the Dáil that Bus Éireann was losing some €6 million a year, and this was not as a result of the State’s subvention to the company but rather due to losses being run up by its commercial Expressway arm, which faces intense competition from private operators.
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Bus Eireann told staff about a series of large cuts to payments and allowances and a reduction in temporary staff today as it seeks to avoid insolvency, The Irish Mirror reported. The company said that if the programme of cuts are implemented fully it would be ready to offer staff an average pay rise of 2% a year over four years. The National Bus and Rail Union (NBRU) responded to the offer and described the proposed pay increase, which they calculated at between 1% and 3%, as “insulting”.
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The threat of the State-owned Bus Éireann becoming insolvent within the next 18 months is very real, its new acting chief executive has told staff, the Irish Times reported. Ray Hernan also said it was clear the loss-making company had to change its business model. However, he insisted that the Expressway service, the company’s commercial inter-city coach service which receives no State subsides, would “ continue to be part of Bus Éireann”. The Expressway service faces strong competition from private bus operators and accounts for the bulk of the company’s financial losses.
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A liquidator has been appointed to a property development company that was involved in one of the biggest pre-crash land deals in the State, according to documents filed with the Companies Registration Office last month, the Irish Times reported. Patrick Horkan of KPMG was appointed liquidator to Galway-based Osberstown Developments Ltd, which was controlled by developers Tom Considine, Paddy Sweeney and local businessman Gerry Prendergast.
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Efforts by the Revenue Commissioners to ensure compliance with tax law yielded €555 million for the exchequer in 2016, a year that saw 17 criminal convictions for serious tax and duty offences, the Irish Times reported. The Revenue, which collected a record €47.9 billion in total last year, completed 537,183 “compliance interventions” as it sought to tackle tax evasion, its headline figures show. There were 1,672 summary convictions, down 19 per cent on 2015, while the number of criminal convictions for evasion and fraud is also down on the previous year, when there were 27.
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AIB has dramatically stepped up its pursuit of defaulting borrowers and is now by far the most litigious Irish lender when it comes to chasing unpaid debts through the High Court, according to an Irish Times analysis of court records, the Irish Times reported. In 2016, the State-owned bank issued almost four times as many High Court debt actions against borrowers as its nearest rival, Bank of Ireland. AIB took 40 per cent more cases against its borrowers last year compared with 2015.
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Denis O’Brien’s Digicel Group has started an unprecedented cost-cutting plan and hired financial consultants McKinsey and Goetzpartners to help cut its massive debt burden as the mobile phone group grapples with declining earnings, the Irish Times reported. Digicel’s €6.2 billion debt is at “unsustainably high levels” at 6.2 times earnings at the group, Michael Chakardjian, an analyst with US credit research firm CreditSights, said at a conference in London this week.
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The State is to receive a €280 million payout from the IBRC liquidators in the next fortnight, as they make their first payout to the unsecured creditors of the former Anglo Irish Bank and Irish Nationwide, the Irish Times reported. The joint special liquidators of IBRC, Kieran Wallace and Eamonn Richardson of KPMG announced on Tuesday that most unsecured creditors are to receive 25 per cent of what they are owed in an interim dividend.
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Online review platform Yelp has taken a €65.4 million writedown on its Irish assets following the company’s recent decision to shut most of its international operations, the Irish Times reported. The company, whose main Irish unit recorded turnover of €32.6 million last year, incurred the impairment charge after it decided to wind down its sales and marketing activities outside of North America. Yelp came in for criticism for the manner in which it announced plans to close the operations, most of which are based in Ireland.
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