Last December, The Currency began to detail the multi-layered holding structure established by National Broadband Ireland (NBI) chairman David McCourt and his co-investors to manage their interests in the state’s 25-year rural broadband contract.

In February, after spending a day with senior executives from NBI and the Department of Communication to clarify its corporate workings, we published an updated map of the companies involved.

As it turns out, there was still something missing.

New documents filed by NBI this week reveal that another Irish company, Breesbrady Ltd, became an intermediary holding entity in the group on September 16, 2021. It sits between Metallah Ltd, the immediate parent of the two NBI companies rolling out and operating the new fibre network, and Bradythrow Ltd, a subsidiary of McCourt’s US-based company Granahan McCourt Capital LLC. 

Click to download full-size map

Unlike other companies in the structure, its shareholding doesn’t reflect the proportional stakes of various investors. Instead, it owns and issues shares designed to perform specific functions, as detailed company constitutions updated last September. Its main function is to issue “tracker shares” with no voting rights. 

So far, Breesbrady’s only reported tracker shareholder has been Bradythrow. Its board (composed of initial director Bernard Keogh, joined last September by McCourt and NBI chief executive Peter Hendrick) has the right to offer more tracker shares.

Asked about the purpose of this structure, a spokesman for NBI told The Currency:

“During the year the Group adopted a Management Investment Plan.

“The Plan has delegated authority to the NBI independent Remuneration committee to determine who is entitled to acquire an interest in the Plan and to set all terms and conditions associated with those interests.

“Neither management nor David McCourt have any involvement in this committee.

“NBI’s Chairman David McCourt is neither a member nor a beneficiary of this Plan, which does not involve any State subsidy.

“Breesbrady and Bradythrow are the companies through which this Plan is administered.  

“The Plan confers no economic benefit to David McCourt and/or Granahan McCourt.”

Tracker shares and tracker reports

Breesbrady’s constitution explains that tracker shares are divided into two sub-classes, one named after NBI Deployment, the group subsidiary currently building out the network, and another class named after NBI Infrastructure, its sister company tasked with owning and operating the national rural broadband service for the next 25 years.

Under the National Broadband Plan contract, the two companies must provide the Department of Communications with two regular “tracker” reports: one keeping a record of each batch of 1,000 connections delivered, and another detailing all permitted expenditure under the contract. The Department uses information from the two trackers to make subsidy payments to NBI.

The constitution of Breesbrady refers to the “NBI 2021 Management Investment Plan” under which  “cash incentive payments” are payable, but the plan is not published and the conditions for such payments are undisclosed. These cash incentives “shall be deducted from any dividend, distributions or returns of capital” payable to tracker shareholders later. In this sense, the performance incentives paid to executives under the plan are taken from future dividends expected of the business. 

The spokesperson said: “No amount has yet been paid in respect of share-based compensation for the year ended 2021 but the accounting provision for the year ended 2021 amounted to €0.3 million (€2020: €Nil).”

Keogh rejoins McCourt

Corporate lawyer Bernard Keogh has held the position of general counsel at Nuritas since 2018. His biography on the Dublin-based biotech start-up’s website states: “Prior to joining Nuritas, Bernard was a senior adviser at Granahan McCourt, a private investment firm focused on connecting people to innovation in technologically underserved areas of the world. He served as General Counsel of enet, the leading wholesale communications provider in Ireland, and sat on the boards of several other entities in which Granahan McCourt held investments.”

Despite the past tense, Keogh has continued to work with McCourt in parallel to his Nuritas job. In November 2020, he was the sole shareholder and director of the newly formed Breesbrady Ltd. He later transferred his shareholding when the company was inserted in the NBI group but remains a director. He also joined the board of NBI’s main holding company Metallah two months ago. 

As director, Keogh also signed all the forms establishing Granahan McCourt’s tracker shareholding into NBI via Breesbrady. 

Further reading

NBI has a new 80% shareholder. What control and return will the company give Asterion?