Written Answers Nos. 79 - 88
79. Deputy Michael McGrath asked the Minister for Finance the reason the State will not retain the remaining Allied Irish Banks preference shares until their maturity date in 2019, after the forthcoming partial redemption of preference shares; and if he will make a statement on the matter. [39975/15]
Amharc ar fhreagra80. Deputy Michael McGrath asked the Minister for Finance the current number of ordinary shares the State owns in Allied Irish Banks; the proportion of company shares this represents; the number of shares it will own after the forthcoming capital re-organisation; the percentage ownership of the company this will represent; and if he will make a statement on the matter. [39976/15]
Amharc ar fhreagra81. Deputy Michael McGrath asked the Minister for Finance his views that the converting of €2.67 billion of preference shares in Allied Irish Banks into ordinary shares will delay the payback to the State of its investment in the bank, as the State is foregoing an annual dividend of €180 million on these shares; and if he will make a statement on the matter. [39977/15]
Amharc ar fhreagraI propose to take Questions Nos. 79 to 81, inclusive, together.
The Ireland Strategic Investment Fund (ISIF), currently holds approximately 522 billion Ordinary Shares in AIB on behalf of the Irish state. This represents approximately 99.83% of the total Ordinary Shares in issue. The forthcoming capital reorganisation will see the conversion of €2.14 billion of 2009 Preference Shares into €2.67bn worth of newly issued Ordinary Shares. The exact number of Ordinary Shares to be issued is currently the subject of discussion between officials of my Department and the bank. A current and fair calculation of the bank's underlying value will form the basis of this discussion. Therefore it is too early to give a precise number of Ordinary Shares that the State will receive, though given that the State currently owns such a high proportion of the Ordinary Shares, the percentage ownership of the company will not change materially.
The State's 2009 Preference Shares are a perpetual instrument and there is therefore no predetermined maturity date - they are repayable at the option of AIB subject to the bank having sufficient capital and also receiving regulatory approval. The SSM approval for a redemption of €1.36 billion of the Preference Shares for €1.7 billion is conditional on the conversion of the remainder to Ordinary equity. This is a mutually beneficial arrangement which allows the State to begin monetising its investment in the bank while allowing AIB to normalise its Balance Sheet. The conversion of Preference Shares into Ordinary Shares does not in any way delay the return of capital from the State's investment in AIB, rather the opposite is the case. Conversion of a portion of the Preference Shares fast tracks the bank's ability to remunerate and redeem State aid through the bank's own cashflow and also opens up the possibility of the State monetising some of its equity investment through a sale process in the future.
The conversion and redemption will bring to an end the annual payment of dividends on the Preference Shares. However it is important to note that the State will retain 99.8% ownership of AIB into the future and following this capital reorganisation we are confident that the bank will be capable of resuming ordinary dividends in the future helping to replace this lost income. The future payment of these dividends is a matter for the Board of AIB and their regulator and given the fiduciary and regulatory obligations involved I cannot be specific about the exact timing and quantum that might be involved.
82. Deputy Michael McGrath asked the Minister for Finance if he is aware of reports that the National Asset Management Agency has sold land with zoning for 11,000 residential units, but only 900 have been built to date; if he regards this as contrary to the best outcome; and if he will make a statement on the matter. [39978/15]
Amharc ar fhreagraIn supporting viable residential development in response to market demand, NAMA does not hoard development land. It has been keen to facilitate other market participants in their attempt to get access to sites which could contribute to residential supply. In this respect, NAMA, fully in accordance with its obligations under Section 10 of the NAMA Act to maximise the achievable financial return to the State through its management and disposal of assets securing its loans, has overseen the sale by its debtors and receivers of zoned sites with capacity to deliver approximately 11,000 new residential units in the Dublin area. However, as the Deputy points out, to date just 900 of these units have been built or are under construction. This may reflect a number of issues, including planning impediments, the difficulties surrounding commercial viability at current sales prices and costs, and the return expectations of some market participants who have decided not to build until prices are higher. The consequence of these issues generally in the market place is that not enough new residential units are being built to meet demand.
Against that backdrop NAMA's commitment to funding, on a commercial basis, additional residential supply not only helps it to obtain the best achievable return on its assets by enhancing disposal values but also helps in terms of making a wider social and economic contribution. I am advised that, since the start of 2014 NAMA has funded the construction of over 2,000 new houses and apartments across 46 development projects in the greater Dublin area. A further 2,200 new units are under construction across 39 development projects in the Dublin area and planning permission has been obtained for a further 4,400 new units, on which construction is expected to commence in 2016.
The Deputy will also be aware that, at my request, the NAMA Board has carried out a preliminary, high-level analysis of development sites controlled by its debtors and receivers with a view to identifying the scope for residential delivery over the five-year period to the end of 2020. Based on this preliminary analysis, the Board has informed me that a delivery target of 20,000 residential units before the end of 2020 is potentially achievable. This 20,000 is in addition to the 2,000 units delivered prior to my Budget announcement in October. NAMA's commitment to funding additional residential supply, on a commercial basis, is a positive step and I am sure that the Deputy welcomes the announcement.
83. Deputy Michael McGrath asked the Minister for Finance the amount of corporation tax collected from multinational companies from January to October 2015 from the top ten paying named sectors, by sector, each in tabular form; and if he will make a statement on the matter. [39979/15]
Amharc ar fhreagra84. Deputy Michael McGrath asked the Minister for Finance the amount of corporation tax collected from multinational companies from January to October 2014 from the top ten paying named sectors, by sector, each in tabular form; and if he will make a statement on the matter. [39980/15]
Amharc ar fhreagraI propose to take Questions Nos. 83 and 84 together.
Given the importance of Corporation Tax receipts in November, any sectoral or other analysis on receipts for the year to date, risks being misleading or incomplete.
I am informed by the Revenue Commissioners that the information currently available in respect of Corporation Tax payments from multinationals for the period January to October 2015, is highly tentative and subject to revision. It may be useful to note that it is estimated that around 80% of Corporation Tax receipts in 2014 and to date in 2015 was paid by multinationals.
The two most significant sectors in terms of Corporation Tax receipts for the year to date are ICT and pharmaceuticals. A full breakdown of 2015 payments by sector is not readily available at present. However, the Deputy may wish to note that a wide range of statistical information is available on the Commissioners' statistics webpage at www.revenue.ie/en/about/statistics/index.html.
In addition, a breakdown by relevant tax-head for the various sectors in respect of each completed year is available on the Revenue Commissioners website at the following link:
http://www.revenue.ie/en/about/statistics/net-receipts-by-sector.pdf.
Figures for 2014 Corporation Tax payments are available and updates for 2015 will be published in due course.
85. Deputy Michael McGrath asked the Minister for Finance the reasons behind the €800 million increase in corporation tax received in October 2015; the sectors in the multinational area responsible for the increase; the amount each named sector has contributed to the increase; and if he will make a statement on the matter. [39981/15]
Amharc ar fhreagraAs I outlined in my previous reply to the Deputy on 10 November 2015, a negative amount of €3 million was profiled in respect of corporation tax receipts in October 2015. The rationale for the minus €3 million was that repayments expected in October were anticipated to be slightly larger than forecast collection. These repayments had been identified to the Revenue Commissioners when the profiles were being produced. However, the repayments did not materialise as expected. This accounted for over €200 million of the very strong over-performance recorded in October.
In addition, there were also unexpected payments amounting to €350 million from a number of large companies due to better trading conditions and a number of early payments which, were expected in November and December, totalling €200 million.
Corporation tax receipts are highly concentrated in the multinational sector. Generally, the largest contributing sectors to corporation tax receipts are the Information, Communication and Technology sector and the Pharmaceutical sector. However, it is important to point out that strong performance recorded in corporation tax receipts this year is relatively broad based. For example, there has been an increase of over 20 per cent in the number of companies paying between €100,000 and €1 million. In addition, there has been an increase of over 20 per cent in the amount of tax paid by medium sized companies. Further data in respect of the breakdown of corporation tax receipts will be published as usual by the office of the Revenue Commissioners in 2016.
86. Deputy Michael McGrath asked the Minister for Finance further to Parliamentary Question No. 93 of 5 November 2011, the costs to the National Asset Management Agency to date of the 66 cases taken against it or against its group entities by third parties; the payments over €100,000 to named legal firms and lawyers to date for the work; and if he will make a statement on the matter. [39982/15]
Amharc ar fhreagraNAMA often defends litigation against third parties who are also/already in active litigation instigated by NAMA against that same third party. In these instances, claims and counterclaims are usually dealt with as joint proceedings by the Courts. For this reason, it is not possible to definitively break down the legal costs attributable to each of the claims and the counterclaims. However, NAMA's estimate is that legal costs incurred to date in defending litigation are of the order of €2.8m. Legal firms in receipt of payments over €100,000 are: Gartlan Furey, A&L Goodbody, William Fry, McCann Fitzgerald, Ronan Daly Jermyn, McCarter English, and Hudson Parker.
87. Deputy Michael McGrath asked the Minister for Finance the costs to the National Asset Management Agency of the 25 favourable court outcomes in cases taken against it; the amount the agency has been able to recover from the unsuccessful third parties; the top five highest amounts still outstanding and owed to the agency in legal costs; and if he will make a statement on the matter. [39983/15]
Amharc ar fhreagraI am advised by NAMA that an estimate of the legal costs incurred by NAMA as a defendant in litigation is in the region of €2.8m. In the cases which have had successful outcomes for NAMA, arrangements relating to costs are usually made either as an order for costs awarded by the Courts, or alternatively, the parties reach an agreement on their respective costs as part of the overall resolution of the case. Thus far, I am advised that NAMA has recovered approximately €2.6m in legal costs. In respect of costs orders outstanding, a number of those are currently at taxation.
88. Deputy Michael McGrath asked the Minister for Finance if there is an opportunity for further interest savings as a result of early repayment of European Union and International Monetary Fund loans; and if he will make a statement on the matter. [39984/15]
Amharc ar fhreagraMy Department, in conjunction with the National Treasury Management Agency (NTMA), will always seek to avail of any opportunity for savings on the cost of our EU-IMF programme loans.
As the Deputy is aware, we have already achieved significant savings in the cost of these loans. The reduction in the interest rates on the EU element of these loans, achieved in 2011, resulted in estimated savings of some €9 billion over the initially envisaged lifetime of these loans. The repayment of some 81 per cent of IMF loans, which was completed earlier this year, will generate further interest savings, estimated at over €1.5 billion, over the original lifetime of these loans. The current interest rate on the residual IMF loan balance is just 1.05 per cent.
There is limited scope for additional interest savings resulting from further early repayment of EU-IMF programme loans.
Firstly, unlike in the case of the early IMF repayment of late 2014 and early 2015, Ireland would be subject to a break-cost charge were it to repay some of the other loan facilities early. These charges could negate any potential savings arising from a potential early repayment.
In addition, the early repayment of programme loans to the IMF, EFSF, EFSM, United Kingdom, Sweden or Denmark would trigger automatic mandatory proportional early repayments to each of the other programme funding partners unless, as was the case with the early IMF repayment, the other lenders agreed to waive the mandatory proportional early repayment clause. A condition of this agreement to waive this clause in the case of the early IMF repayment was that Ireland retains a significant element of IMF funding in order to maintain the IMF's participation in post-programme monitoring for the duration initially envisaged, which is out to 2021.
Finally, I would add that as part of the recent re-financing of a €5 billion EFSM maturity, resulting from the maturity extensions to EFSF and EFSM loans granted in mid-2013, the EU raised funding at a weighted average yield of just over 1.1 per cent and with a weighted average life of approximately 14 years. As of close of business Monday 9 November, the yield on the 2.4% Irish Government Treasury Bond maturing in 2030 was 1.80 per cent, approximately 70 basis points higher than the weighted average yield on the re-financed EFSM loan.
