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Roundup-INM knives are out at AGM

Friday, June 08 08:16:49

Independent News & Media's chairman, James Osborne, and other directors face the prospect of being voted off the board at its annual meeting in Dublin today. It is understood that Dermot Desmond, who owns 6.36 per cent, has already cast his proxies against the re-election of Mr Osborne and other directors, with the possible exception of Paul Connolly and Lucy Gaffney, who represent Denis O'Brien on the board.

Mr O'Brien, who owns just under 30 per cent of INM, has yet to cast his votes but there was a growing expectation last night that he could vote against the re-election of Mr Osborne, who became chairman last October. Finance director Donal Buggy will also be under pressure to retain his position on the board. Chief executive Vincent Crowley and non-executive directors Frank Murray and David Reid Scott are also up for re-election.

Mr Murray has served nine years on the board, while Reid Scott was appointed in December. Mr Osborne has clashed with Mr Connolly over his decision to pursue a legal action against the E1.87 million exit package paid to former chief executive Gavin O'Reilly on April 19th. This action is expected to conclude in the Commercial Court today. On April 26th Mr Osborne asked Mr Connolly to resign from the board of INM after he initiated his legal challenge. The board has recommended to shareholders that they oppose Mr Connolly's re-election.

Mr O'Brien is expected to seek a poll for each vote relating to the election of directors. Lothar Lanz yesterday became the latest INM non-executive to step down from the board. Baroness Margaret Jay and Bengt Braun also recently retired as non-executives. The Irish Times

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Ireland's competitiveness has "significantly improved" in the past few years, Taoiseach Enda Kenny told a gathering of business leaders yesterday. Addressing a conference on Irish competitiveness organised by the US embassy in Dublin, Mr Kenny pointed out that Ireland had regained its position as one of the world's top 20 countries for competitiveness in the IMD World Competitiveness rankings published last week. "We are number one in the world for the availability of skilled labour and we are second in the world for productivity and efficiency," he said.

Mr Kenny added that the European Commission anticipated that Irish unit labour costs would fall by a cumulative 16.5 per cent from 2009 to 2013. In contrast, unit labour costs in the euro area as a whole were forecast to increase by close to 6.7 per cent over the same period. "These projections show that Ireland's relative position will have improved by around 22 per cent vis-a-vis the euro area since 2009," he said.

Heinz chief executive Bill Johnson said Ireland needed "continued fiscal discipline and the courage to make further tough decisions" if it was to achieve financial stability and renewed growth. He said Heinz's factory in Dundalk, Co Louth, which employs about 230 people and produces more than 60 million frozen meals annually for the Irish, British, French and Swedish markets, was "a very stable facility". "Our business in Ireland has not been affected like some of our other businesses in terms of downsizing. We have a very capable business here."

Heinz has reduced manufacturing capacity by 25 per cent since 2007 and closed nine out of 81 factories around the world last year. Speaking after the conference, Mr Johnson, who succeeded Sir Anthony O'Reilly as chief executive of the Pittsburgh-headquartered company in 1998, said he believed Europe could recapture some of the manufacturing business it had lost in recent years.

"I think manufacturing is going to return to the West. Labour costs are continuing to rise in Asia. I think the biggest impediment to that has been governments' unwillingness to help manufacturing to come back in - very stringent environmental rules, inflexibility in terms of the way they react to businesses." The Irish Times

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IF Spain gets a deal for its banks Ireland wants Europe's bailout funds to take on the cost of dealing with around E20bn of loss-making tracker mortgages and to help ease the E3.6bn annual price of keeping IBRC (the former Anglo Irish Bank) alive, the Dail's Public Accounts Committee heard yesterday.

That is according to John Moran, the new head of the Department of Finance. He was questioned by TDs about the prospects for Ireland if Spain secures European aid for its banks while avoiding an Irish-style government bailout. Such a deal for Spain would be a dramatic shift in European policy, after taxpayers here had to shoulder the entire E64bn cost of rescuing Irish banks.

Mr Moran said it is "impossible" to say how quickly Ireland could avail of a change in policy, even if a deal is done for Spain. But, he said it is important that Irish officials remain close to the talks that are now going on, so that any new policy can be availed of by Ireland. He outlined two critical issues under negotiation: first, European help in improving the viability of Irish banks by removing "certain low-yielding assets" from their balance sheets. Second, relieving the debt taken on by the state to rescue the banks, including the E30.8bn Anglo Irish Bank promissory note, he said. The Irish Independent

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The National Treasury Management Agency is hoping to return to the bond market before the end of the summer, but the key to selling Irish long-term bonds will be the uptake by Irish pension funds. A spokesperson for the agency reiterated the position, saying: "The NTMA previously indicated that it hopes to issue some treasury bills during the summer and that remains the position."

Davy's global strategist, Donal O'Mahony, said that the key to solving Ireland's funding issues was incentivising Irish pension funds to buy Irish paper.

Mr O'Mahony said that he expected the NTMA's issue over the summer to be a baby step towards a fully fledged selling of long-term debt before the end of the three-year programme of troika funding which finishes in 2013. "You can expect the treasury bills issue to probably occur in the next four weeks," he said, but cautioned there was a lot of event risk posed by the problems in Spain and Greece. The Irish Examiner