Thursday, February 27 08:09:58
A major shake-up in the mortgage market is on the cards following a move by Permanent TSB to be announced this morning which will allow existing customers sell their homes and take out new mortgages while retaining a significant portion of their tracker loans. While the bank refused to comment on the precise details of the plans last night, it is understood it is likely to charge a slightly higher margin than currently applies when issuing the new trackers. The new rate will apply to the existing mortgage which is transferred to a new home. Anything above that will attract the current standard variable rate (SVR).
While the new arrangements will see homeowners who wish to sell their existing homes and buy another one pay more interest, it will still provide them with substantial savings compared to the alternative they currently face of forgoing their tracker and taking on a new mortgage on variable or fixed rates. Typical tracker rates are set at between 0.5 and 1.25 percentage points above the European Central Bank rate which is currently at an historic low of 0.25 per cent. Standard variable rates are typically higher than 4 per cent. The Irish Times
Eight former senior executives in the Quinn Group are backing a bid by three northwest businessmen to buy back the manufacturing arm of the business, now called the Aventas Group. The eight include former group chief executive Liam McCaffrey, former group development director Kevin Lunney, former group finance director Dara O'Reilly, and former radiator division chief executive Denis Doogan.
The three local businessmen leading the consortium, called the Quinn Business Retention Company (QBRC), are John McCartin, a Fine Gael councillor who leads Newtowngore Engineering Ltd, John "Bosco" O'Hagan, managing director of the Specialist Joinery Group, and Ernie Fisher, former managing director of Fisher Engineering Ltd. Mr McCaffrey told The Irish Times the consortium was in talks with banks and private equity funds to support a bid for the entire business of Aventas, which has five manufacturing divisions from glass to cement. "KKR [a US $40 billion private equity fund] was prepared to offer us finance in 2011 to fund a management buy-in," Mr McCaffrey said. "Finance is a lot easier to raise now than it was then."
Mr McCaffrey agreed it was possible rival bids might also emerge. "We just want to be treated fairly and equally." He said a priority would be to get access to up-to-date financial data for Aventas before making a formal bid. The Irish Times
Duncan Bannatyne, the Scottish entrepreneur and star of BBC TV's Dragons' Den , has said the Irish taxpayer has lost out on up to £25 million (E30.5 million) after his loan was sold at a discount to Lone Star, an international investment fund. Mr Bannatyne told The Irish Times he believed from reports his loan was sold for between 70p and 75p in the pound as part of a bundle of other loans acquired by Lone Star.
He said he had previously made an offer of 97p in the pound to pay off the debts of his fitness chain of £115 million, but this had been rejected by KPMG, the liquidator of Anglo Irish Bank. "Why are you and your fellow countrymen allowing Lone Star make a profit of £25 million?" he asked. "I owe the money so I'll repay it but I wouldn't be happy if I was you and the taxpayers of Ireland. I would be knocking on the doors of parliament asking Mr Noonan what is going on." The Irish Times
Ulster Bank employees are not likely to learn about their fates today when owner Royal Bank of Scotland (RBS) reveals what it plans for the entire bank. Anxiety is high at the Irish bank where some employees have been told to attend meetings today where they will be briefed on plans for changes. But sources said the meetings would focus on transferring bad debts to a bad bank rather than letting employees go.
Finance Minister Michael Noonan has so far appeared sanguine about the outlook for the country's third biggest lender despite calls in Britain for all of Ulster Bank to be placed in a bad bank or even closed down. The Irish Independent