The insolvable solution

It is time to take another look at the frontier of our Irish brethren. Not that I am calling Sir Anthony O’Reilly a ‘friend’, ‘brother’, or ‘comrade’, but I am a lot less likely to be on the side of the bank, or am I?

You see, there are a few issues that I found interesting, however this could end up being a complete figment of my Imagination, but I let you decide.

First a little more on the consequences of this case, it seems fitting to use the Irish Independent (at http://www.independent.ie/irish-news/courts/former-billionaire-anthony-oreilly-loses-bid-to-postpone-aib-moving-in-on-assets-30389647.html) for this.

We can all agree that the following quote is a given “Mr O’Reilly’s legal team argued that if a stay was not granted, the consequences for him and two of his companies are ‘potentially enormous’“. Nobody likes to be forced to sell. I have been there, all being for different reasons, and I lost around 35,000 Euro on that little caper, so when it comes to holding grudges, I know exactly where Mr O’Reilly is at this particular moment in time.

The quote “Mr O’Reilly’s lawyers argued that he ‘is hopeful’ that the sale of his Castlemartin Estate in Co Kildare – described as ‘the jewel in the crown’ – would discharge most or all of the debt owed to the state-owned lender“, gives weight to my earlier title ‘The sharks are circling‘. The question becomes how or better to which extent the others will now move in as AIB is going for the jugular as per immediately.

This is the part that never made complete sense here. It is not about the debt, all parties agree, the fact that AIB will now get 100% of any risk back makes tactical sense, the fact however that AIB has only 11% of the debt and others the rest is also part of this little conundrum. The part that kept on re-emerging was ‘Providence Resources’.

It is nice that the Irish papers are staying on par, so here is the next part (at http://www.independent.ie/business/irish/providence-resources-post-loss-of-72m-in-2013-30388958.html). There are two bits that are interesting. The first is that they had a success in 2012 (as claimed). If Barryroe is a success, as claimed at (at http://www.providenceresources.com/uploads/interimresultshalfyearjune2012-finaltables.pdf), then why is AIB in such a rush to get to the jugular? In my view 3,514 barrels of oil per day comes to well over a quarter of a million a day. Which means there is money coming in, but is it?

Even though 2012 was a success, how much is coming in and how much is there to be made. This is where the issues rise. There is little news from either Exxon or Providence Resources. Is this the issue? You see, that is what I found initially too. There was little, but that does not mean too much. If the Barryroe well was still producing and under those conditions money was coming in, the banks could have made a deal with O’Reilly.

So, when I was going through the papers that I found, I was looking at a few things. I made a conspiracy theory reference for more than one reason. One of them was the reference I found in the AIB financial report. In 2011 a person named Declan Collier was prominently mentioned, it stated “Prior to joining the DAA he held a number of senior management positions with the global energy company, Exxonmobil“, He moved to another position on June 28th 2012, yet he did not get any governance mention in 2012, yet there on page 5 we see “A short biography and background of all our Directors is set out on pages 168 to 170“, the new members Peter Hagan and Tom Foley, were mentioned, yet Declan Collier as a leaving member was not. This does not mean anything yet, but the fact that his remunerations were mentioned (as they should), having his details there with the governance team would have been more correct.

This is however not about being correct, or about the lack of governance details. Lets take a look at the events for filing the case. At http://www.rte.ie/news/2014/0526/619683-aib-oreilly/ we see that on Monday May 26thAn action being taken by AIB against businessman Tony O’Reilly in relation to debts of more than €22 million has been admitted to the fast track division of the Commercial Court‘, in itself that is no large issue, filings are done at every twist and turn. The quote “He gave Mr O’Reilly ten days to file a reply to the bank’s claim and he listed the matter for 2pm on 23 June.” got to me however, I had to read up on a few things and I was impressed with the timelines of the Irish courts, these fine young legal eagles do not take it easy, still 10 days for a 22 million brief is a little short (but not wrong, improper or devious in any way).

So, why all these mentions? why this conspiracy theory line?

This is at the heart of the matter. You see, there is no indication of any conspiracy, yet looking at the prospects, the oil found and not to forget the events as they are unfolding, or better stated as they were not unfolding. ExxonMobil has made no press visibility in regards to the areas of Providence Resources at all. ExxonMobil is down a bit, but that is no worry, because of the sheer size of ExxonMobil. Yet, is it that hard to believe, or perhaps in more legal terms ‘is it more likely than not‘ that a person like Declan Collier keeps tabs on his past connections, all of them? Is it that far-fetched that he got the inside scoop form a ‘friend’ and he dropped perhaps a ‘hint’ with another friend? Is that so far out of the realm of possibilities?

In that regard, if so, perhaps the AIB did not act to get all of their outstanding debts, but to make sure they ended up with at least part of it? I left this all out of the initial article as it is basically the thoughts of a conspiracy theorist, but is it that improbable?

If these matters are indeed at hand (or not), then what will happen next? What news are some not made aware of (let’s be honest, it is not the job of ExxonMobil to readily give out bad news), yet this scenario gives another light to the AIB court case, it is as I personally see it not that far-fetched (I would say that wouldn’t I), but does this information change anything? When the others realise (if my assumptions are true), that they got the outside track and were surpassed by AIB, what will THEY do next?

I am not sure about this, yet, as having been the underdog myself on more than one occasion, if Providence Resources do hit pay dirt on a second well, how will the AIB then react? Will the credit range suddenly be ‘extended’? Let’s be honest, if O’Reilly gets back on track then the AIB will have pissed of 14% (possible 28%) of all the Billionaires in Ireland (they apparently have 7 of them). How much business will AIB miss out of then, especially as they are down 20 billion at present?
No matter how this rolls, keeping your eyes on the AIB for the near future might be entertaining.

Time will tell!

 

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