ESB to set up 'grey market' so staff can sell shares for €22k
THE ESB has told current and former workers it hopes to set up the company's first ever 'grey market' in the company's shares by September, opening the way for staff to cash in shares worth up to €22,000 per employee.
A letter, seen by the Irish Independent, from the Employee Share Ownership Plan (ESOP) says it hopes to pass out the shares, which were awarded to staff over several years, from September 30 onwards, starting with 50pc of the staff shareholding.
A grey market is an internal market within the company where workers can buy and sell their shares.
Based on the Government's €4bn valuation of the ESB, this would value the staff shareholding -- which consists of 5pc of the company -- at €200m.
Divided between about 9,000 existing and past staff, this would work out at about €22,000 per worker.
The letter from the ESOP does not speculate on the value of the company and it makes it clear this process will only begin when the Revenue Commissioners have to be given an initial value for the shares.
The letter says the way has been cleared to set up the grey market after a recent decision by Minister for Energy and Communications, Pat Rabbitte, to allow the ESB Group to hold on to transmission assets that were proposed to be transferred to EirGrid.
The shares were given to ESB staff as part of various industrial-relations deals struck between unions and the company. However, up to now, they have been held in a block by the ESOP and not distributed for sale or purchase by individual employees.
"The trustee has been working towards the appropriation of shares and running the first internal market and is pleased to advise that it hopes, shortly, to pass out... up to 50pc of the ESB capital stock (shares) notionally allocated to you,'' the ESOP chairman David Beattie wrote in the letter.
"There are, however, a number of significant steps still to be completed before we can appropriate -- especially agreeing an initial value of the shares with the Revenue Commissioners,'' he added.
One of the issues to be addressed is whether the shares will be subject to the universal social charge.
The owners of the shares, will be able to sell the shares in the event that the ESB is privatised in the coming years. It is not clear what will happen if the company sells of just a part of its business, such as its generation station or its overseas business, ESB International (ESBI).
Internal or 'grey' markets for shares tend to depress prices as they do not have the same level of liquidity as public markets.
According to its last financial statements the ESB currently has almost 7,000 staff. It is understood that newer entrants to the company did not receive shares as they were not party to the earlier labour agreements.
The ESOP has told its members that it will be updating them on the progress towards the grey market.
"A detailed timetable of events, together with further information on both appropriation and the operation of the internal market, will be issued to you shortly," wrote the ESOP.