The Irish Government has announced plans to dispose of State assets up to a value of €3 billion. The NewERA unit of the National Treasury Management Agency is acting as the Government’s financial adviser in respect of the disposal programme, which is expected to commence in 2013.
Assets listed in the disposal programme include Bord Gáis Éireann’s energy business and some of the Electricity Supply Board’s non-strategic power generation capacity. The Government has also indicated that consideration will be given to a sale of some of the assets of Coillte, the State forestry company, and the State’s remaining 25% shareholding in Aer Lingus.
What you need to know:
Bord Gáis Éireann (BGE)
- What is it? – A major energy provider supplying both gas and electricity to approximately one million customers throughout Ireland
- For sale – Bord Gáis Energy, the arm of BGE which includes Bord Gáis Trading and Bord Gáis Assets
– Bord Gáis Energy provides gas and electricity to residential and business customers
– Bord Gáis Trading procures gas, electricity and carbon on wholesale markets
– Bord Gáis Assets is responsible for the operation and maintenance of existing power generation assets and the development of new assets, such as the company’s wind portfolio - Not for sale – Gas transmission and distribution networks, or BGE’s two gas interconnectors
Electricty Supply Board (ESB)
- What is it? – The national electricity provider
- For sale – Some non-strategic power generation assets
- Not for sale – Strategic assets, including its transmission and distribution network
Coillte
- What is it? – A 100% State owned company operating in forestry, land based business, renewable energy and panel products
- For possible sale – Some of Coillte’s assets, most likely harvesting rights to its forests (previously valued at approx. €1.8 billion by Deloitte)
- Not for sale – Land on which the forests are situated
- Potentially interested parties – International forestry companies and international forestry investment funds
Aer Lingus
- What is it? – The flag airline carrier of Ireland
- For possible sale – The Government’s remaining 25% shareholding
- Possible sales price – €177.5 million, based on NCB’s price target of €1.33 per share (as at 22 February 2012). The Government’s indicated minimum selling price is €1 per share
- Reported interested parties – JetBlue Airways, Etihad
National Lottery Licence
The Irish Government has also announced plans to hold a competition for the grant of a new licence to operate the National Lottery. The licence will be granted for a 20 year period. The Government has confirmed that the grant of the licence will require an upfront payment to the State, although it has not yet confirmed how much this payment will be. Media reports suggest that it will be in the region of €400 to €600 million.
An indicative timeline leading to the award of the new licence has been published. An invitation for expressions of interest in applying for the licence is due to be published in August 2012 and an invitation to apply for the licence is due to be published in October 2012.
Recent media reports state that various parties have expressed interest in applying for the licence, including An Post; G’Tech Corporation (owned by Italian gaming company, Lottomatica); Camelot (the UK lottery operator owned by the Ontario Teachers’ Pension Plan); Tatts Group (an Australian gaming company); and private equity companies.
