IN THE PAPERS
In The Papers 25 November
25-11-2008
by Sylvia Leatham
Babcock & Brown on verge of collapse: reports | Smart Telecom goes back to court
The Irish Times says that Dublin has been chosen as the European City of Science for 2012, as reported by ENN on Monday.
The paper also reports that Eircom's staff credit union has written to members telling them it cannot pay a dividend this year because of losses sustained on bonds sold to it by a stockbroking firm. The E-services Communications Credit Union also told its 13,000 members that it is suing Davy stockbrokers, which sold it the bonds, to recover the cash it invested in them. The High Court is to hear the case on 3 February. The credit union is one of 300 for which Davy invested money in perpetual bonds issued mainly by European banks.
In other news of Eircom, the paper says that speculation is growing that troubled investment group Babcock & Brown, which is an indirect shareholder in Eircom, could be placed into receivership this week, unless management can resolve a dispute over a frozen AUD70 million bank deposit. On Monday, two directors resigned -- Dieter Rampl and Joe Roby -- and the company requested that its shares remain suspended until the week beginning 1 December. "Babcock & Brown is still seeking to resolve the dispute with a bank, which holds a deposit of a material amount, relating to the release of that deposit," the company said.
The paper also reports that a number of legal actions involving former Smart Telecom chief Oisin Fanning, arising from the October 2006 buyout of Smart by Smart YuRoE Broadband, have come before the Commercial Court. Two sets of proceedings brought by Fanning were admitted to the court, while Justice Peter Kelly also heard Smart Telecom intends to bring its own action against Fanning. Smart says it will allege Fanning breached his fiduciary duties as chief executive officer of Smart in allegedly unlawfully diverting a corporate benefit of opportunity to his own use. Smart will also contend that Fanning used Smart Telecom funds to acquire a 25 percent stake in Outpost Property Holdings Ltd, owner of the freehold of the Smart headquarters premises.
The same paper says that legendary Dublin music store Abbey Discs has closed its doors, on the back of the digital explosion in music distribution. Owner Billy Murray said people now download their music or buy mainstream CDs in supermarkets at prices Abbey Discs could not compete with. "I'm sad, but the financial burden was too great; it's been very tough," he said. Murray predicted that many more music stores were in his situation and that the New Year would see more closures.
The Irish Examiner reports that work to develop cancer treatments, healthier food and high-end technology has been funded by University College Cork's EUR150 million share of a national research fund, but the Government is under pressure to make the next round of money available as soon as possible. Education Minister Batt O'Keeffe would not speculate about the timing of an announcement of the next phase of the Programme for Research in Third Level Institutions (PRTLI) when he visited UCC on Monday, although Taoiseach Brian Cowen is expected to reveal the funding at an event marking the 10th anniversary of the scheme on Thursday.
According to the Financial Times, micro-blogging start-up Twitter recently held talks about an acquisition by social networking giant Facebook. The discussions valued Twitter, which has yet to make any money, at as much as USD500 million. However, Facebook's approach to Twitter is set to raise as many questions about the bidder's value as it does about the target. The social networking site offered to pay for the acquisition in stock, according to one source, but putting a value on its shares is proving controversial. "If Facebook brings USD500 million of stock to the table to buy Twitter, the first thing you talk about is whether that stock is worth USD500 million or not," said one Twitter investor.
The Wall Street Journal reports that Hewlett-Packard has said the economic slowdown will be challenging for the company, but Chief Executive Mark Hurd said it expects to emerge from the turmoil in a stronger competitive position. Hurd's comments came as the company posted fiscal fourth-quarter earnings that exceeded Wall Street forecasts. The results were expected after HP last week made an early announcement of favourable earnings. Revenue grew 19 percent to USD33.6 billion from the same period a year earlier. Net income for the quarter was USD2.11 billion, or USD0.84 a share, down from USD2.16 billion, or USD0.81 a share, a year earlier. Excluding restructuring charges, acquisition-related charges and other items, the company earned USD1.03 a share -- better than the USD1.01 that analysts had expected.
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