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Roundup-Irish Life not to be sold, yet

Thursday, September 20 08:17:58

State-owned insurer Irish Life is unlikely to be put up for sale until there is sustained improvement in the euro zone, the insurer's chief executive said yesterday. Kevin Murphy was speaking as Irish Life announced pre-tax profits of E96 million for the first half of 2012, up from E16 million a year earlier. Plans to sell Irish Life were abandoned last year due to the euro zone crisis. Canadian insurer Canada Life is thought to have been the main contender to buy the insurance group. In June court approved the State's purchase of Irish Life for E1.3 billion as part of its recapitalisation of its former sister bank Permanent TSB.

Irish Life's chief financial officer David McCarthy said yesterday the sale of RBS's Direct Line insurance business in the UK in the coming months would give a strong indication of investor appetite for insurance companies. Mr Murphy said a E1.3 billion price tag would be "quite achievable as a target today" given that it was more than 70 per cent of the group's E1.8 billion embedded value. Irish Life yesterday posted a profit of E96 million for the first half of 2012, and E112 million on an embedded basis. Embedded values are used in the insurance industry to reflect the long-term value of insurance companies.

The Irish Life Group comprises a retail and corporate pensions business, fund management company Irish Life Investment Managers, as well as brokerage and third-party administration companies Cornmarket and Irish Progressive Service International. It also has stakes in Allianz and, more recently, Glo Healthcare. Irish Life is the largest life assurance company in Ireland with 29 per cent market share. The Irish Times

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A leading US financial services company will more than double its workforce in Limerick as part of a major expansion of its Irish operation. Fund administrator Northern Trust is to take on another 400 employees at its Limerick base over the next five years. Minister for Jobs Richard Bruton, who met company executives during a trade mission to the US, made the announcement. "These are highly skilled roles and the company will work with University of Limerick and the Limerick Institute of Technology in filling them," he said.

The Limerick office, which already has 300 workers on the payroll, is regarded as a fund administration centre of excellence. It provides administration and support to alternative, multi-manager and traditional investment managers, pension funds, multinationals, insurance companies and not-for-profit organisations. Catherine Duffy, general manager for Northern Trust's Limerick office, said UL and LIT would be a strong source of new graduate employees. The expansion is being supported by the Government through IDA Ireland.

Jobs will be available in traditional and hedge-fund accounting, financial reporting, pricing, private equity, alternative asset administration, real estate administration, finance, IT, human resources and training and corporate services. IDA Ireland chief executive Barry O'Leary said the announcement was a coup for Ireland and Limerick. "This investment strengthens Ireland's reputation and specifically the midwest region, as a location of choice for highly skilled financial services operations." The Irish Times

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Irish-owned Digicel has completed a major E1.5bn refinancing and cut its borrowing costs after tapping the global bond markets, in one of the largest deals of its kind for a company based in the Caribbean or Latin America. The mobile phone company owned by billionaire businessman Denis O'Brien raised $1.5bn (E1.14bn) through a new corporate bond offering. The new bonds are due to be repaid in 2020 and offer a yield, or interest rate, of 8.25pc for investors.

Proceeds have been used to buy back and cancel E1.25bn of older bonds that were originally due to mature in 2015 and carried higher interest rates of 9.125pc and 9.875pc. It means the effect of the refinancing is to cut the company's borrowing costs and push back its debt maturity profile.

The deal is more than double the size expected when Digicel first announced its refinancing plan on September 5. Strong investor demand meant that even the larger bond issue was oversubscribed, with the same amount of money again offered to the company by investors but declined. Digicel initially indicated plans to raise $700m in the markets, and offered to buy back the same amount of older debt. The Irish Independent

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Aldi has launched a new advertising campaign to highlight its growing use of Irish suppliers. It focuses on buying Irish and what it claims are its "longstanding partnerships with Irish farmers and producers". The retailer says the campaign aims to emphasise to Irish consumers that they can buy quality Irish groceries at an affordable price by shopping with Aldi. Developed by McCann Erickson, "Love Ireland, Like Aldi", will run across TV and press and will also involve the roll-out of in-store point-of-sale branding, including the production of an information brochure detailing its relationship with Irish suppliers and producers, which is now available at each of Aldi's 96 Irish stores.

Commenting on the new advertising campaign, Aldi's group buying director Niall O'Connor said: "Given the choice, our customers tell us they prefer to buy Irish, as they like the guaranteed quality that comes with buying Irish and want to support the local economy." The Irish Independent