Political unfavorable after media coverage of the broadband company’s financing structure
Legal and trade advisers have told the government that the ownership and control of the multibillion-euro broadband company has not changed and that the financing arrangements are “in line with the agreement.”
Prime Minister Ossie Smith said last week that he wanted to reconsider the deal after it was reported that investors in the Irish National Broadcasting Company (NBI), which set up the project, had paid € 50 million in fees and interest. The first full year of the project, which was granted to the company last year. He was also concerned about the amount of investment in the company through high-interest loans.
A spokesman for the communications ministry said Monday night that ministers Iman Ryan and Ossian Smith had received notes from departmental officials on the basis of an investigation by NBP contract legal and commercial advisers [William Fry and EY] after the deal was signed. , there has been no change in oversight and funding arrangements are in line with the agreement. ”
But recent public revelations in Currency and Business Post about the multibillion-euro project’s financing structure and the amount of investment it has lent to the winning company have raised political frustrations over the government’s broadband plan.
Sources said there was some concern as Fianna File and the Green Party tried to implement the project in 2019 amid protests from senior government officials. Senior budget officials, including then-Secretary-General Robert Watt, have warned against unprecedented approval of the bill on a number of grounds.
The US businessman who manages the project, David McCort, was paid a large sum last year, according to company accounts.
NBI Infrastructure, the two implementing companies, and Metallah Ltd, the parent company of NBI Deployment, paid 32.7 million euros to NBI Bidco LLC in the United States, which is controlled by Mr. McCormack.
Mr. McCort and his investment vehicle, Granahan McCort, are the project’s leading investors.
The payment is “related to the costs incurred by the group’s investors over a number of years in connection with the selection, negotiation and successful completion of the 25-year project,” Metallah estimated.
Granahan McCourt, another US company controlled by Mr. McCourt, paid Dublin LLC an additional 3.4 million euros for “organizational readiness and network design activities” related to the project, and another organization, NBI Management Limited, paid 1.9 million euros.
Following the rejection of competition by Eir and ESB-Vodafone joint venture Siro, the NBI was awarded a government contract in 2019 to introduce broadband networks to 540,000 households and businesses.
The delay in Kovid was the first step, and this year the number of homes “crossed” by the network was reduced from 115,000 to 60,000.
According to an account submitted to the company’s Registry (CRO), Metallah received a € 98 million loan from NBI investors, including Oran Hill, a US hedge fund used to finance the first phase of the project, in addition to Granahan McCourt. Last year, 11.8 million euros were paid in interest on these loans.
Under the deal, NBI investors initially promised 175 million euros in working capital and 45 million euros in investment, but a loan of 98 million euros was part of the investment.