ESB told to raise more than €400m in assets sales to repay debts
Published 08/01/2013 | 05:00
The €400m that the Government has told the ESB to raise by selling off power stations will be increased so that some of the company's debts are repaid as part of the disposal plan, the Irish Independent has learned.
The target for sell-offs is being increased to ensure that some of the ESB's debt is paid off.
It's being done so the ESB's "BBB" credit rating is not damaged as a result of the sales.
That's according to an end-of-year presentation prepared by the semi-state and circulated to investors in December.
The full scale of the sell-off won't be known until the sales get under way, because the debt will be repaid in proportion to the loss of revenue and assets.
The ESB has debts of €4.5bn. It means that more of the ESB's power generation assets than first thought will be sold so that targets for asset disposals under the terms of the EU/ IMF bailout do not damage the company.
In October the Irish Independent revealed that the ESB had been ordered by the Government to pay €400m to the State in the form of a special dividend by selling power stations over the coming two years.
The state still wants its €400m from the asset sale, but lenders will be first in the queue to be repaid from sales, according to the latest investor presentation.
The order to sell off assets was made to the ESB board in October. The sales are part of the wider disposal of state assets ordered by the troika.