The Plan: Save Denis

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eoin writes:

That National Broadband Plan can’t come quickly enough for Denis O’Brien. Bonds in his Digicel business are trading at 33c in the dollar. Thanks Fine Gael, you’re the best!

Last night: ‘€12,000 Per House; €7,000 Per Farm; And €15,000 Per Business’

Yesterday: When It Rains

53 thoughts on “The Plan: Save Denis

  1. Truth in the News

    This is a rip off, like the water meters and who was the real winner Siteserve and who
    owns them…..this a heist on rural Ireland and Vraradakr and his crew need hammering
    at the local and european elections….little wonder the junk bonds are up 33%

    1. Dan

      Siteserv, 100 million bailout from taxpayer. The only company where the shareholders were paid after bankrupcy

    2. GiggidyGoo

      Don’t forget the security barriers used to keep the plebs a safe distance from these excuses for leaders. Yep – Dinnykins has that contract too.

    3. eoin

      Just on the Digicel bonds, you misinterpreted things Truth. They have a face value of $1 which is what Digicel owes the holder. However, they are trading at 33c today because the market doesn’t think Digicel can pay the holder. Earlier this year, when the bonds were trading at around 50c, the Phoenix magazine claimed this meant Digicel was worthless to Denis O’Brien. If Digicel was worthless at 50c, it’s worthlesser at 33c.

      So, isn’t it nice for FG to cushion that bad news by awarding Denis another huge telecoms contract in Ireland.

  2. millie st murderlark

    Oh fupp the lot of them.

    A plague of sneezes that never happen upon the lot of them.

  3. The Menace of [Redacted]

    Let’s just give Dinny the abortion contracts.

    Surely nobody could object to that..?!?!

      1. phil

        Maybe maybe not, but it would be easy for a journalist to find some information , for instance, it would cost about €6 per foot of 288 Count Fiber, now Im not sure how many kilometers will be laid , but Im pretty sure it dont make a blind bit of difference what the endpoint is whether it be house , farm or business …

    1. Cian

      London to NY is 5,600KM
      How much cable would need to be laid to connect all homes in Ireland?
      I don’t know, but I’d a guess it would be about the same as all roads in Ireland. Wiki says there are 99,830km of roads in Ireland. So 18 times further. €270m x 18 = €4,800,000,000

      Saying that, the cost of a sea-cable is much different to digging up roads.

      1. Cian

        Interesting facts
        – : the ESB electrification of Ireland (300,000 homes between 1946-65) cost £36m
        – inflation wise £36m in 1955 (midpoint) is worth about €1.09bn today.
        – 80,000km of lines strung;
        – 1 million poles erected

        By 1995 there was a 99% connection rate and the total cost was £140m; so it cost an extra £106m between 1965 and 1975. (midpoint inflation £106m in 1970 was worth about €1.76bn today.

        Total cost of Rural electrification (in todays money): €2.85bn

        https://esbarchives.ie/key-rural-facts/

  4. dhaughton99

    Don’t you know that they’ll bring in a charge for every other user in the country as a tax just like energy and banking.

  5. Dr.Fart MD

    they don’t negotiate. they have no experience in it, and they get rings ran around them by people who can.

  6. BS

    jesus flippin christ….

    3 BILLION euro of tax payers money…and then the state doesnt even own it?! thats theft!

    And what will happen? nothing…FG might lose a few seats in the locals, FF win a few, they all jump up and down in a sports hall somewhere…maybe theres a GE soon, maybe FF get in, they do exactly the same as FG did…feed from the trough, make sure their mates get some deals in the process, walk away with the pension.

    I know apathy is a terrible thing to have, and collectively we should all be standing up and making a big deal of this type of crap, but if we were to get up and march over every single thing we’d be there every day…NCH…NBP…water charges…it’ll be massive hikes in fuel for the 2020 budget from carbon tax, and what will we do? be mentally exhausted and take it…just like they want us to…

      1. eoin

        Thanks Johnny, I don’t think many people in Ireland will be familiar with either the Gleaner or JMMB, but the former is a huge daily paper in Jamaica and the latter is like the Irish equivalent of Goodbody (I wonder are its funds delivering negative returns though????)

        Digicel doesn’t publish accounts because it is a private company almost entirely owned by Denis O’Brien. It does provide quarterly updates to certain bondholders and some of that gets leaked to the newspapers. Today, the Gleaner reveals Digicel made a net quarterly loss of $23m in the three months to December 2018, that’s new information that I don’t think has come into the public domain previously.

        1. Johnny

          morning Eoin,agreed haven’t seen that level detail before,thanks.
          -it’s early here,coffee/exercise will try find out,what was left over after retiring short term debts from that 600mio PP-not forgetting fees to Island Cap;)
          any ideas on burn rate ?

          1. eoin

            There should be a presentation to bondholders for the fourth quarter, the three months to March 2019, in the next three weeks and we’ll get a better idea then.

            Didn’t it have just $96m in cash at the end of December 2018? Doesn’t it have a few major licences to be renewing in unstable countries? Wasn’t there huge disruption in some countries in the first quarter and more depreciation of local currencies?

            I don’t know what cash it had on hand at the end of March 2019, but I have a feeling despite the $600m bonds that things are still very precarious.

          2. johnny

            200 million left over after paying off some lines according fitch-haiti is up shortly for renewal.
            no ‘new’ rating agencies reports but will keep an eye out.
            the JMMB one is some read-wow.

  7. Joe Small

    Am I missing something? is Denis O’Brien part of the broadband bid?
    It might be useful to look at the real reasons for expensive rural broadband roll-out – the abundance of one-off rural housing, where everyone lives near a village but no one lives in it and where so many country people just want to build on some road frontage away from everyone else, while still expecting high-speed broadband. This is not how other Europeans live. I recently asked some Swedish colleagues about problems of rural broadband roll-out and they said there were none.

    1. eoin

      “is Denis O’Brien part of the broadband bid?”

      He is, but I don’t blame you for asking the question. You’ll recall the disgraced former communications minister ” Mr Naughten insisted the first he knew of the final composition of the consortium, which now includes Denis O’Brien’s Actavo [Siteserv], was when he read it in a newspaper.”

      Remember,, this was after that dinner between Denis Naughten and David McCourt where Denis kindly informed David that David could change the composition of his consortium without affecting the bid, so what did David do, he immediately brought in Denis O’Brien’s Siteserv.

      This just looks so sleazy.

      1. GiggidyGoo

        Is there not something that the EU should be worried about. A one horse race. Surely the manner this has been run and managed flies in the face of what the EU tendering process is all about. Is a US business allowed to be involved for instance in a EU tender process? Were there any Far East interests? Or were they excluded? If so Huawei so?

      2. Vanessa (spiritually) Frilly Keane

        And still nothing back on the FOI requests for decisions and what-have-you surrounding the appointment of the Independent Peter Smyth into Naughten’s handling of the Tender Process and his communications and socialising with the Bid Principals and their PR people

        The whole thing is rotten
        A bailout for their pals
        Jobs for the boys

        Don’t let social progress like diversity and equality and access to healthcare for women fool ya
        Or fall for the smiley selfies, jogging, new daddies and hanging out with popstars
        Don’t for a moment think there’s a new breed of Government Minister

        Nothing has changed

  8. Owen C

    So €2,970m headline cost
    €545m of this for contingency
    €355m for VAT (you can see they’re learning their lessons from the NCH debacle)

    So €2,070m expected net cost

    This is spread over 25 year, with “majority expected in first 10 years”

    If I assume €150m per year in years 1-7, €100m years 8-10, €50m in years 11-25, that’s €2,100m total. Discount it back at 2% (government cost of long term funding), and its €1.75bn in net present value terms. Still a lot of fupping money (and there needs to be much more transparency on how the deal is fully structured), but just some context for what the ‘real’ cost of this might be (ie if the government said they were going to spend on average €75m per annum in today’s money for the next 25 years, it would sound a bit different). Whole thing seems like another politics vs finance mess though.

  9. Joe Small

    Am I missing something? is Denis O’Brien part of the broadband bid?
    It might be useful to look at the real reasons for expensive rural broadband roll-out – the abundance of one-off rural housing, where everyone lives near a village but no one lives in it and where so many country people just want to build on some road frontage away from everyone else, while still expecting high-speed broadband. This is not how other Europeans live. I recently asked some Swedish colleagues about problems of rural broadband roll-out and they said there were none.
    From an EU Commission report (2017) – “In terms of financing, the Irish strategy centres on a combination of commercial and state-led investments, the latter predominantly in areas of market failure. These areas are particularly difficult to cover given that Ireland has one of the lowest population densities in Europe (67 people per km²).” Source: http://ec.europa.eu/newsroom/document.cfm?doc_id=43390

  10. Qwerty123

    3 Billion and the state wont own the asset, makes the bank guarantees seem like good value now.

    1. Owen C

      what would the residual value be in 25 years time on a rural fibre optic network? Its not zero, obviously, but I suspect its not going to be a huge number either. Given the advancements in wireless/spectrum distributed data (including drones/satellites etc), I’m not sure how likely it will be that we’re still using pipes to get data in and out of people’s homes in 2045.

      1. johnny

        oh la la haven’t been this excited since math camp-are you working on a IRR ?
        -will it be as fooping useless as your feeble NPV attempt,why are you downplaying/rubbishing contingencies,is that based on a like hunch or your crystal ball, can’t be based on past performance.

      2. rotide

        The reason this is costing so much is that the state sold off the existing copper network as part of the sale of TE. Not owning this is bad.

  11. kellMA

    TBH this is the final nail in the coffin for me with regards to any regard i may have had for FG. It may not go down well here but I generally liked Varadkar and have not been so anti FG as many are, but THIS is just enough. This to me is unbridled incompetence.

    1. Bodger

      Yesterday evening’s announcement was very telling. They were actually squirming. They know everyone knows.

      1. Ian-O

        They do but sadly the Irish have great expertise to turning a blind eye when it suits them.

        There is something incredibly sinister going on here and I truly wonder who DOB has on the hook?

        Considering his incredibly swift rise without any discernible talent when it comes to dealing with people, health departments or social ‘protection’ (and his obvious complete lack of empathy to the point of possible pathology), I’m thinking its Varadkar.

  12. rotide

    There is enough to be discussed about this mess without bringing in the Broadsheet Bogeyman every second post.

    It’s so frustrating that there are very real issues about this whole thing that are being completely drowned out by “OMG REDACTED IS GETTING 3 BILLION FROM US” which is just stupid.

    1. Ian-O

      For once I agree with you.

      He will only be getting a portion of that 3 billion.

      But he will be getting it.

      1. martco

        @editor
        “OMG REDACTED IS GETTING 3 BILLION FROM US” which is just stupid”
        @Ian-O
        “He will only be getting a portion of that 3 billion”

        indeed but I don’t think many would be in this simplistic cash way of thinking in all fairness

        as well you know what it DOES do is boost his numbers, gives him the APPEARANCE of someone who has money & assets & is running healthy successful large scale balance sheets….our friend can sidle up to the financiers & leverage, Trump-onomics. It places him in a position of huge advantage.

        1. rotide

          This is exactly what I’m talking about.

          It’s fine if you dislike DOB and resent his shady deals. It’s fine to complain about his involvement but this is a massive structural plan that affects the future of the country and it’s being done arseways .

          I don’t give a single poo wtf DOB does, I care a LOT more about the infrastucture in this country going forward.

  13. eoin

    I wonder how much Denis O’Brien’s Siteserv will be receiving directly from the National Broadband Plan? Presumably less than €3bn. But will he be getting a share of future revenues on top? And what about secret success fees, we know from the corporate watchdog investigation at Independent News and Media that there was to be a secret €1.1m success fee paid to Denis’s company when publicly-quoted INM sold overseas assets? What sort of success fee would be possible in a situation where Denis convinced a government to sell its reputation for fiscal prudence and award a €3bn contract in the face of massive opposition from the people responsible for minding the public purse?

    Might this contract be worth a lot more than €3bn to Denis, I wonder?

  14. eoin

    You couldn’t make it up.

    On the same day that Denis O’Brien becomes the preferred bidder, as part of the GM consortium, for the €3bn broadband plan, the High Court has given the green light to one of the bidders in the last large telecoms award by FG permission to proceed with their claim for damages from the allegedly corrupt contract award.

    “Ms Justice Teresa Pilkington rejected an application by the State and businessman Denis O’Brien, who are defendants in the case, to strike out the amendment application. Persona/Sigma is suing the Minister for Public Enterprise, the State and Mr O’Brien over the awarding of the licence to Mr O’Brien’s then Esat Digifone consortium in the mid-1990s. Former Fine Gael minister for communications, Michael Lowry, is a third party in the case.” reports the Irish Times

    Separately, has anyone checked if the High Court has ruled on allowing the publication of the corporate watchdog investigation of malarkey at Denis O’Brien’s Independent News and Media.

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