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O’Brien’s Island is a lucrative place to be

The 18 executives and administrative staff at Island Capital Services are paid an average of €263,000 each

Denis O’Brien: will he revive his plan to float Digicel in New York next year?
Denis O’Brien: will he revive his plan to float Digicel in New York next year?
Sat Nov 12 2016 - 07:00

Accounts filed this week for Island Capital Services, the operational entity behind Denis O'Brien's Island Capital financial advisory firm, show it is surely the most lucrative part of the billionaire's empire in which to work.

A note to its accounts shows that its 18 executives and administrative staff were paid more than €4.7 million last year – that's a whopping average of about €263,000 each. That's more than six times better than the average staff member at Communicorp. The 471 staff of O'Brien's radio group shared €19.76 million in 2014 or €41,800 each.

The Island Capital accounts filed this week are an abridged version with limited detail, but the company is believed to be a serious money spinner for O’Brien.

In documents filed for the aborted Digicel flotation last year it was revealed Island is paid an advisory fee of 0.5 per cent of every transaction for which it is retained, including several huge bond refinancings for Digicel.

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Island was on course for well over $6 million from the flotation, and its advisory arrangement with Digicel, the documents said, earned it $28 million in the three years leading up to the pulled deal last October.

The Island Capital Services accounts appear to show a reduction in its revenue reserves of €1.6 million, although it is highly unlikely that this is due to a loss given the period covers the run-up to the planned Digicel flotation, which would have earned it huge fees even though it was pulled..

It is far more likely that Island paid a dividend or bonus of some sort. Its cash balance reduced by more than €3.8 million in 2015 to €1.7 million.

Meanwhile, will O'Brien revive his plan to float Digicel in New York next year? The elevation to the White House of Donald Trump, who excoriated Hillary Clinton for her links to O'Brien in nasty terms during the election, could make life more difficult for Digicel.

The US president-elect’s policies are likely to lead to inflation, higher interest rates and a stronger dollar, making Digicel’s debt pile in dollars more expensive to pay off in Caribbean currencies.