Business Irish

Monday 24 July 2017

Investment banks offer free work to State

advice

Emmet Oliver

Several investment banks have offered to work for free in giving the Government and the NTMA valuations of state companies.

The Irish Independent understands several large investments banks have offered to work on a 'pro bono' basis valuing some of the assets and advising on the best ways to dispose of them.

This is with a view to being hired at a later stage to advise on a formal sales process. Fees from such a contract would be highly lucrative.

However, the NTMA and the Department of Communications have yet to appoint anyone officially to sell the ESB stake, or the other assets.

The NTMA has set up a new unit -- NewERA -- which is completing a review of how to sell a stake in the ESB. It is also reviewing what other assets could be sold in addition to the energy company.

ESB could be sold to a trade buyer, auctioned to the open market or sold via an Initial Public Offering (IPO). This last option is considered the most unlikely at this stage.

About 25pc of the ESB is expected to be sold and the method for selling it will be discussed at a Cabinet meeting shortly before Christmas, according to political sources.

Bord Gais is currently not for sale after the Government concluded that the firm would not reach a price sufficient to satisfy Ireland's international lenders. The only way Bord Gais would bring in large enough proceeds would be if its network was sold off and that has been ruled out by Minster for Communications and Energy Pat Rabbitte.

It is understood the NTMA has held informal discussions with a number of sovereign wealth funds and pension funds about some state assets, but a decision to proceed on a transaction requires a political sign-off.

NewERA is working with the National Pension Reserve Fund to develop a Strategic Investment Fund with the medium-term goal of establishing a Strategic Investment Bank.

Irish Independent

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