By Stephen McKinley
A survey by PricewaterhouseCoopers shows the dire consequences if Northern Ireland’s political institutions fail in the wake of First Minister David Trimble’s July 1 resignation. More than 90 percent of overseas companies based in Northern Ireland would cut proposed new investment if the institutions collapse. Business leaders are also fearful of an even worse Drumcree situation this summer than before. Stephen Kingon of PricewaterhouseCoopers said that the survey showed the direct correlation between business confidence and political stability.
Aer Lingus interregnum The board of Aer Lingus appointed a subcommittee last Friday to find a new chief executive. It also appointed John O’Donovan, group finance director since 1995, as acting chief executive. Michael Foley had been CEO, but he was fired last month after two employees filed sexual harassment charges against him.
Central Bank says economy will slow in ’01 Ireland’s Central Bank predicted that the economy would grow at 6.5 percent in 2001, down from an eight-year average of 8 percent. Agreeing marginally with European Commission criticisms, the Bank said that the government ought to aim for growth of at most 5 percent, or else risk inflation. The inflation rate in Ireland is already the highest in the European Union, and is "unlikely to abate for some time," it warned Last month, inflation registered 5.4 percent. Noting that Irish consumer spending was "especially strong," the bank said the government should alter its spending and tax-cutting plans, because "fiscal policy can make a useful contribution to promoting stability at this juncture." The easing of the economy’s growth was attributed to the slowdown in the U.S. economy. Eighteen percent of Irish exports go to America.
Kerry gets Golden Vale Golden Vale has agreed to the Kerry Group’s $252 million bid for the dairy cooperative. Kerry will offer one share for every 10 Golden Vale shares, and shareholders will also get a 13 percent cash incentive. The offer comes out at about $1.54, and there will be a full cash alternative at $1.50 per share. Kerry Group’s managing director, Denis Brosnan, said, "Combining Kerry and Golden Vale business represents a logical development and opportunity." For Golden Vale, Jim Murphy said the offer was "fair and reasonable and good value to our shareholders. I believe that joining Kerry Group will enable Golden Vale to continue to develop as part of a larger growth focused organization."
Celtic Mining news Mining group Celtic Resources will float on the London Stock Exchange, and will use SG Securities (London) Ltd. as sponsor, financial advisor and corporate stockbroker, the company has announced. Celtic will also list on the Irish Stock Exchange, and will use Davy Stockbrokers as sponsor, financial advisor and stockbroker. The flotation, planned for autumn 2001, should raise substantial capital for Celtic, enabling it to increase gold production at its 50-percent-owned Nezhdaninskoye gold project in the Yakutia district of Russia’s Far East as well as accelerate development of various of its mineral and hydrocarbon projects in Kazakhstan. Commissioning of Nezhdaninskoye is under way, with first ore mined and the plant operating to produce gold concentrates. In Kazakhstan, the company’s 50-percent-owned Suzdal gold mine is said to be operating well, with budget and productivity on target to meet this year’s forecast output of 46,000 ounces. The company expects to be generating revenue in the second half of 2001.
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Irish Life sell-off Insurers Irish Life and Permanent will receive $253 million for two American subsidiaries that it is selling off. Interstate Assurance and First Variable Life Insurance have been bought by Protective Life Insurance in Alabama. Irish Life says it plans to focus squarely on the market in the Irish Republic and Northern Ireland.
Jobs for Letterkenny Going in the opposite direction from Irish Life is Prumerica, a U.S. life insurance company that has announced that it will open a $6 million operations center in Letterkenny, Co. Donegal, creating 325 new jobs. Prumerica is a unit of the Prudential Insurance Company of America, which is among the largest financial institutions in the world. It is not affiliated with the UK-based Prudential PLC. Tánaiste Mary Harney welcomed the news for Donegal, and said that it was "unqualified recognition of the suitability of regional locations for top -quality service businesses." Prumerica is not new to the Irish scene, however, having had a software development center in Letterkenny since July 2000, which has meant 150 jobs already. For Prumerica, Paul Carmody said that the location was superb, not least because of the wild beauty of Donegal. No doubt the cost of labor had something to do with it as well. For the Investment and Development Agency, Frank Conlon said that if this success was to be built upon, "an accelerated approach to the provision of high quality infrastructure" would be needed, and quickly. The news represents a total of 800 new jobs created with IDA backing in the last six months. Another U.S.-based company, Pacificare Health Systems, announced an expansion in April, creating 160 new jobs in Letterkenny.
C&C uncorks Findlater, a family-owned wine business, has been acquired by Cantrall and Cochrane, the drinks and bottling consortium in Ireland. No details were released, but analysts speculate that with Findlater’s annual profits of $1.3 million, C&C must have paid about $17 million for the company. The acquisition gives C&C 18-19 percent of the market share, making it the largest wine distributor in Ireland. Wine consumption in Ireland has an annual average growth of about 15 percent.