Dissension exists over SWS future direction
That splurge left IAWS with a 26% equity stake in the toll roads to wind and waste management group.
IAWS boss Philip Lynch has not requested nor has he been offered a seat on the board of NTR, chief executive Jim Barry confirmed to the press on Monday when the group announced good results for last year.
NTR is not just a toll road operator. It also has substantial interests in waste management and in wind energy, both of which were thought to be the reason Mr Lynch bought into NTR in the first instance.
When Jim Barry was asked about Mr Lynch’s prospects of a seat on the board of NTR, the answer that he had neither asked for nor been offered a seat was polite but not terribly enlightening and was followed by a sort of knowing smile.
In essence, it said Mr Lynch may want to have a significant influence on our business, but he isn’t going to get it. Mr Barry was quite specific about Greenstar, believed to be a key part of Mr Lynch’s overall strategy for the co-op. The waste management end of the business, is not for sale. To be fair to NTR, there is no ambivalence in their position.
They simply refuse to speak their minds about what they understand is going on from an IAWS and more particularly a Philip Lynch perspective and that’s their prerogative.
Greenstar was thought to have been a key target for Mr Lynch when he decided to make the surprise raid on the shares of NTR when they become more readily available some months ago.
What looks pretty certain is that the 26% stake taken by IAWS in NTR will not go unrewarded in financial terms, but whether it delivers strategically is another matter entirely.
Over the past five years NTR has invested nearly €500m across its operations and further significant capital investment is on the cards as the group continues to build its presence across the toll road to waste management and wind energy sectors. How the IAWS stake finally plays out is very much a matter for conjecture and it looks as if Mr Lynch will have to sit tight and allow the value of the investment to grow, which he insists is what he always intended. If he had broader ambitions it looks as if they have been frustrated because the Roche family control over 51% of the equity that is not for sale.
How the entire process plays out over the next few years could be influenced significantly by development elsewhere for IAWS, particularly its offer to buy parts of SWS in Bandon, specifically the waste and wind energy parts of the business.
That process has not exactly gone according to plan so far and already the initial up-front offer price has been cut from €50m to €42.5m. Concerns about the development of the wind energy business is understood to be the reason for the dip in price.
There is little doubt that delays with the wind farms were the trigger that forced the IAWS boss in his last round of talks to offer significantly less than his original price for SWS.
After much speculation the West Cork Co-ops and Dairygold eventually voted to accept the lower offer.
Bandon and Barryroe voted against, but the vote in favour was six votes of eight. Clearly dissension exists over the future direction of SWS. Management was against the deal and canvassed the co-ops to change their minds even after the offer had been accepted.
It was suggested, but has not been confirmed, that SWS management were prepared to accept a lower offer of €40m from Mr Lynch, but the co-ops in west Cork held out for more. In the current climate the possibility exists that Mr Lynch will cut his offer price yet again.
Those close to the talks suggest this saga is far from over and that we will see a few more twists and turns before any deal is done.
