The biggest losers from Irish debt restructuring
A report into the state’s debt restructuring scheme says the country’s biggest losers were the companies and firms which have been the biggest beneficiaries of the restructuring scheme.
The report, by Credit Suisse, said the €11bn was spent on debt restructuring for the 12 largest companies and their affiliates in the country.
This included €8bn for the three largest firms.
Credit Suisse said this amounted to an annual loss of €7.3bn for these companies.
The €11 billion was spent primarily on restructuring of their credit ratings, which fell from AA+ to AA in the past two years, and the value of their share capital, which rose from €10bn in 2015 to €19bn in 2020.
In addition, the report said the cost of debt restructuring has been a drag on growth in the Irish economy, and is the main reason why Irish companies have been losing ground to rivals such as China.
The companies and institutions that were most impacted were Irish Water, Irish Aviation and Irish Gas, which have all seen their share prices fall by more than 15 per cent since the scheme began.
The group of Irish firms which suffered the biggest losses from the restructuring were:Airbus Group, Airtel, Irish Water (which is wholly owned by BT and has a stake in Airline Ireland), KPN Group, Leinster Rail, Mervyn King, Paddy Power, Tullow, WAP Group and the West Coast Light Rail Company.
Credit Bank of Ireland was the only Irish bank to remain profitable during the scheme, and has since been restructured into a “single-annual recapitalisation fund”, meaning the government will get a share of its cash for the first year.
The Irish Government has said the scheme is the largest ever in the history of the country and is expected to create around 1,500 jobs and generate €3.5bn in tax revenue.
The scheme will cost the taxpayer around €5.5 billion over the course of its five-year operation.