Asset Sale Details

mike65

No surprises with the sale of Bord Gáis Éireann retail, ESB non-strategic power generation. Coillte (not the sale of land banks) and the outstanding 25% stake in Aer Lingus to be sold when the prices are better. Talk of up to €3 billion being raised of which up to one third can be used for economic investment under the memorandum.

I await the threat of a strike from the well heeled of the ESB.

SeaFields

mike65 wrote: »

the outstanding 25% stake in Aer Lingus to be sold when the prices are better.

Free publicity opportunity for Michael O' Leary coming up in the near future so...

mike65

Eihad airways are being talked of.

Sacred_git

How is this possible, i thought esb and Bord gais had esop schemes? Can the holders refuse to sell their shares etc or on th eother hand will they just lose their shares??

Max Powers

Id sell off ESB (hold off on networks), coillte, aer lingus and bord gais in a flash. Talk about selling of rights to a cash cow like the lotto for short term gain is madness though.

[Jackass]

Max Powers wrote: »

Id sell off ESB (hold off on networks), coillte, aer lingus and bord gais in a flash. Talk about selling of rights to a cash cow like the lotto for short term gain is madness though.

That entirely depends on the terms of the sale.

I agree though that we should look to sell off some state assests and look to privatisation in certain areas.

Not only will it raise revenue, but it will also bring efficiency to these areas (I'm thinking transport too - rights to running services like DART and Train etc.)

I would advocate good regulation and price capping agreements.

pcworldisajoke

So Bertie, the only one outside of Coillte and the cabinet with secret knowledge of the resources, will get his buy for that consortium now yeah? Or is that land bank exclusion for definite?

And i'm delighted the ESB is being flogged- there were regular accountants walking in there starting on 75k a year or more through contacts etc.

Dr Galen

mike65 wrote: »

Eihad airways are being talked of.

Rumour Alert

From those apparently in the know, this is actually a very real prospect. Discussions have supposedly taken place, informally anyway. Etihad also recently upped their stake in airberlin, so they are in a semi expansive frame of mind.

Tora Bora

pcworldisajoke wrote: »

And i'm delighted the ESB is being flogged- there were regular accountants walking in there starting on 75k a year or more through contacts etc.

And the lucky buyer, gets this guy to have coffee with on a regular basis

flutered

he did not do any better for himself than many a politician.

antoobrien

Sacred_git wrote: »

How is this possible, i thought esb and Bord gais had esop schemes? Can the holders refuse to sell their shares etc or on th eother hand will they just lose their shares??

It's not really a barrier to the sale, the ESOPs can be given a share in the new company in much the same way as Eircom shareholders were given shares in Vodafone when they sold Eircell.

They can also be given a larger portion of the state portion of the company if that's seen as better.

The issue with the pensions in Aer Lingus would be a barrier to a sale though (can't remember if it has been sorted).

golfwallah

Minister Howlin has just been on TV, saying that the Government had negotiated hard with the Troika to allow a substantial portion of revenue from asset sales to be spent on “Job Creation”.

To create sustainable jobs for Ireland’s long term future, I’d prefer to see this money invested in R&D and improvements in education, rather than in short term, politically expedient measures to create immediate jobs.

The Government would be well advised to look at other successful high-tech economies (such as Israel). Years ago, Israel resisted the temptation of immediate job creation in favour of developing a high-tech R&D capability and is now reaping the long-term economic benefits.

Populist politics aside, it shouldn’t be that difficult to select suitable areas for long-term investment of this asset sale windfall. But then, when did we ever have politicians who put leadership and vision ahead of immediate popularity?

n97 mini

Tora Bora wrote: »

And the lucky buyer, gets this guy to have coffee with on a regular basis

Unfortunately not. The ESB themselves are drawing up the list of "non-strategic" power stations, therefore expect it to be very short, only contain rubbish, and be of no interest to potential buyers.

ESB have dodged the bullet yet again.

swampgas

golfwallah wrote: »

<...>
Populist politics aside, it shouldn’t be that difficult to select suitable areas for long-term investment of this asset sale windfall. But then, when did we ever have politicians who put leadership and vision ahead of immediate popularity?

When did we ever have an electorate with any vision or concept of long-term strategy? Unfortunately, populist politics works - this reflects as badly on the people as it does on the government they elect.

golfwallah

Rubbish power stations, Aer Lingus pension hangover ..... beginning to sound like a there are large liabilities buried in the list of assets!

That leaves Coillte, Bord Gais and maybe the National Lottery.

Let's hope they get the €3 billion.

[Jackass]

golfwallah wrote: »

Minister Howlin has just been on TV, saying that the Government had negotiated hard with the Troika to allow a substantial portion of revenue from asset sales to be spent on “Job Creation”.

To create sustainable jobs for Ireland’s long term future, I’d prefer to see this money invested in R&D and improvements in education, rather than in short term, politically expedient measures to create immediate jobs.

The Government would be well advised to look at other successful high-tech economies (such as Israel). Years ago, Israel resisted the temptation of immediate job creation in favour of developing a high-tech R&D capability and is now reaping the long-term economic benefits.

Populist politics aside, it shouldn’t be that difficult to select suitable areas for long-term investment of this asset sale windfall. But then, when did we ever have politicians who put leadership and vision ahead of immediate popularity?

These are appauling services, running at a defecit, and we still maintain "free" education...

Are you suggesting we forefit tens of billions to hold on to these overstaffed blackholes of Economy rather than free up funds, cut the expenditure, make a lot of money, and invest it in activities that will create jobs and revenue and get the economy moving again?

Our public sector is so over staffed and overpaid, it is in national interest now to flog the vast majority, allow the cull, make a fortune, lose the massive burden of paying the rates Bertie set in a boom to buy votes, and use the vast savings and massive funds from sale to stimulate Economic growth.

Our hands are tied...and bertie is fastening the knot...

mike65

I thought this list pretty conservative, not even a mention of the Bord Na Mona, ports, airports, National Stud, CIEs Intercity bus routes (okay won't get much but the private sector would certainly buy), RTE radio 2 (why does the state own a faltering pop music station?).

bagsmcg

I always find it confusing. The state owned companies are to be sold off to private investors who wish to see a return for the money. It logically follows that these companies have the ability to produce profit for those that are seeking to buy them thus reaping a dividend on their investment. I am puzzled why the state can not run these businesses as profitable businesses and thus the tax payer who has forked out in their taxes to establish these companies can enjoy these dividends rather than private individuals/companies/investors. I look at the toll roads which made a huge fortune for those that invested in the private part of the deal. Why couldn't the state have made this money and maybe reduced charges etc with proper management. The killer was that the state then paid an extraordinary amount to buy some of these roads back!!!The amount of waste by the state now and in the past is criminal and I do not trust them to get the best deal possible for these assets. However I do think that particular individuals will profit very well from these deals. Ordinary joe is been played as a muppet again!!

MadsL

mike65 wrote: »

I thought this list pretty conservative, not even a mention of the Bord Na Mona, ports, airports, National Stud, CIEs Intercity bus routes (okay won't get much but the private sector would certainly buy), RTE radio 2 (why does the state own a faltering pop music station?).

Bord na Mona's business model is ageing rapidly and they don't seem to be able to find another, despite allegations that their peat filter 'biodigesters' aren't worth of the Agrément Certificate NSAI oddly gave them as they don't work properly.

Ports and Airports are very politically sensitive, would you really want O'Leary running the airports?

National Stud...better off removing the tax breaks inho.

CIE are a clusterfk. What are they actually worth?

and RTE2 are worth fk all - better just to bring it off the air and kill off the salaries, along with Kenny, Finucane, Whelan and other 'National Treasures'.

RPA might be a better choice..LUAS has value and we might get it finished for free.

n97 mini

mike65 wrote: »

RTE radio 2 (why does the state own a faltering pop music station?).

Thanks for reminding me. Even though I pay a lot for it I haven't listened to Radio 2 in over 20 years.

View

So, are they going to sell off NAMA's assets? There must be a hedge-fund (and/or politically well connected investors) who'd buy the property portfolio if we discount it enough... :-)

thebman

MadsL wrote: »

CIE are a clusterfk. What are they actually worth?

and RTE2 are worth fk all - better just to bring it off the air and kill off the salaries, along with Kenny, Finucane, Whelan and other 'National Treasures'.

Be surprised what these brands are worth I'd say.

MadsL

thebman wrote: »

Be surprised what these brands are worth I'd say.

CIE and RTE worth? Major union headaches for anyone who buys them...

Tea drinker

Can we not sell RTE for a few Euro, and get rid of the licence fee, let it pay for itself.
Surely that saving for the exchequer and the current license payers means a large cash injection into the economy?

donkey balls

I suspose we could gete rid of the ESBI after all there another shower of lazy semi state companies costing us money according to some people:rolleyes:,Here is a link to the ESBI website and the operations there involved in around the world http://www.esbi.ie/our-businesses/case-studies/ESBI-Corby-CCGT-UK.pdf
http://www.esbi.ie/about-us/about-us.asp
I would also like to point out that I don't work for either the ESB OR ESBI but I have a close friend who does work for them,My take on the situation is that if that part of the company was to be flogged off to a foreign company, they more than likely would close the Irish operation and move it to their home country which could mean more job losses here in Ireland.

BeeDI

From today's FT. China preparing to liberalize capital controls, to make it easier for Chinese companies, buy up "cheap" foreigh assets.

No doubt, if the changes were ready today, China would mop up half this country in one afternoon:eek:

http://www.ft.com/cms/s/0/bd948148-5dfd-11e1-8c87-00144feabdc0.html#ixzz1nDVCYsNn


China pushes capital control reforms

By Simon Rabinovitch in Beijing


China should accelerate the loosening of capital controls, the central bank has said in a landmark report that outlines the path to a critical reform for the economy.
Foreigners would be given far greater access to the Chinese stock and bond markets within a decade under a three-phase plan to liberalise investment flows into and out of the country. The central bank said the plan would also allow Chinese companies to take advantage of a “strategic opportunity” to buy cheap foreign assets and help transform the renminbi into an important international currency.

MadsL

donkey balls wrote: »

I suspose we could gete rid of the ESBI after all there another shower of lazy semi state companies costing us money according to some people:rolleyes:,Here is a link to the ESBI website and the operations there involved in around the world http://www.esbi.ie/our-businesses/case-studies/ESBI-Corby-CCGT-UK.pdf
http://www.esbi.ie/about-us/about-us.asp
I would also like to point out that I don't work for either the ESB OR ESBI but I have a close friend who does work for them,My take on the situation is that if that part of the company was to be flogged off to a foreign company, they more than likely would close the Irish operation and move it to their home country which could mean more job losses here in Ireland.

But ESBI are very profitable, why would we sell them??

ESB's international division recorded a 52pc rise to €222.4m in the first six months of 2011 and a €95.6m operating profit

K-9

MadsL wrote: »

But ESBI are very profitable, why would we sell them??

ESB's international division recorded a 52pc rise to €222.4m in the first six months of 2011 and a €95.6m operating profit

Because it should go for a high price because of that. I'd share donkey balls fear that eventually the work would be shifted out of Ireland and sub contracted.

Pete_Cavan

Thankfully the government has decided against selling a minority share in ESB in favour of selling non-strategic power generation capacity. At least this approach leaves the door open for unbundling in the future. A sale of ESB with the grid attached would have all but ended any hope for a competitive energy market.

Saying companies like ESB return "a profit" to the taxpayer is irrelevant without considering;

1. how does this profit compare to the cash that would be released from disposing of the asset
2. is the current level of profit likely to increase/decrease/remain constant
3. what is the ROI
4. what further investments are needed in order to ensure the assets continues to return a profit

It would be interesting to see figures on the economic benefits of having real competition in the energy production sector (such as decreased cost of doing business) compared to the "profit" ESB creates.

Selling rights to Coillte assets is also a good idea, they contract out many elements of their work so rather than paying others to come in and do it, they can sell the harvesting and planting rights (say for 60 years/one rotation) while still retaining ownership of the land and future harvesting rights. Amnenity woodlands are worthless in commercial terms so the state will obviously be holding onto them.

antoobrien

I just took a look at the exchequer statement from last year.

Payments to the government by semi state bodies in 2011
Lottery surplus: €230m
Bord Gais: €33.091m
ESB: €73.167
Bord na Mona: € 4.115m
Coillte: €10m
Dublin Port: €16.5m
Others: €0.634m
total - €367.5m

2010 returns:
Lottery surplus: €250m
Bord Gais: €30.251m
ESB: €89.718
Bord na Mona: €9.286
Coillte: €0
Dublin Port: €5.5
Others: €0
total - €384.755m

Looking at these figures and seeing the benefit of the lottery to the exchequer I don't think we can sell it. I've heard €500m-€700m bandied about for this, it's not enough if we can make that in 3-4 years of letting An Post run it.

I think we have to do something about the cost of energy in Ireland, so BG & ESB have to be restructured and real competiton brought in.

mike65

Selling the National Lottery is all about the terms and conditions, the whole idea is that a very large sum is raised for good works and that would continue to be the case if sold off so the actual % of turnover would clearly be the negotiating point. Camelot donate 40% in the UK. Irish NL turnover was about €768,600,000 in 2009 so about one third seems to go to causes/slush funds (!).

MadsL

How much do Gtech get paid to run it??

One third of profits doesn't seem very much to be donated? Is the rest recycled as prizes??

Max Powers

ESB unions prevented the ESB from going up for sale, this is a pathetic indication of our govts lack of will. If they cant stand up to the unions in this time of economic crisis, there is no hope for us ever fulfilling out potential in this country. This is truly depressing

antoobrien

MadsL wrote: »

How much do Gtech get paid to run it??

One third of profits doesn't seem very much to be donated? Is the rest recycled as prizes??

I can't remember the rules and they may have changed since I was involved in the club lotto but there's only a certain amount that can be kept (legally) as costs, given as prizes and the rest has to be donated to the specified cause.

I think in Ireland it's something like 40% max payout in prizes (but it could be max 40% donations).