One51’s NTR stake jumps €40m

THE investment of €120 million in NTR by One51 chief Philip Lynch looks set to pay dividends for One51, with the 26% share in the company now valued at €160m.

Last year One51 boss Lynch shelled out €120 million in buying up 26% of the stock of NTR, the toll-road to wind-and-waste management group. One51, formerly IAWS Co-Op, is one of Ireland’s leading investors in the waste, energy and related sectors.

Mr Lynch plans to bring One51 to market this year.

Critics at the time One51 invested in NTR suggested Mr Lynch could have ratcheted up his stake for a lot less money.

Mr Lynch has not sought nor been offered, boardroom representation at NTR, despite One51’s huge investment.

This is despite the fact that after the NTR-founding Roche family and close associates, One51 is the single biggest stakeholder in NTR. The Roches and One51 now have a combined stake of 70% in the group.

But after last week’s dramatic announcement the Government is to buy out NTR’s stake in the West Link toll bridge, One51’s decision to invest in NTR looks to have been inspired.

Estimates vary on the value of the deal to NTR, but it is expected to exceed €500 million in total.

The Government deal will see NTR handed profits on a plate, years in advance of when they could have expected them to materialise.

Payment will be based on 2007 earnings, which are projected to earn NTR €40m.

On that basis and given a 13-year life left to run in the contract between the state and NTR, theoretically the group is line for compensation of €520m for lost earnings.

That represents a huge gain to NTR and One51 collectively. The deal is technically worth €120m to One51, based on its 26% stakeholding in the company.

Mr Lynch said the investment in One51 was long term and he was in it for dividend and capital gain.

Market analysts were sceptical.

But his investment now worth €40m more than it was with huge plusses set to flow through the Government’s NTR buyout bonanza.

Apart from its toll road operations NTR is heavily involved in wind power though its 51% stake in Airtricity.

Greenstar is its waste management division.

Both Greenstar and Airtricity represent areas of opportunity One51 plans to exploit in the years ahead.

Mr Lynch’s aim initially may have been a takeover of NTR, but the current outcome will certainly enhance his case for investment fund backing for a flotation of One51.