Sunday 18 February 2018

Blackstone considers re-entering auction for Bord Gais Energy

Brendan Howlin, Minister for Public Expenditure and Reform, has spoken in defence of Budget changes.
Brendan Howlin, Minister for Public Expenditure and Reform, has spoken in defence of Budget changes.
Donal O'Donovan

Donal O'Donovan

PRIVATE equity giant Blackstone is taking a second look at a bid for Bord Gais Energy, despite pulling out of the privatisation auction earlier in the year.

An offer could reinvigorate the sale process, where the Government is under pressure because offers are falling short of a price of up to €1.4bn it had hoped to raise from the sale of Bord Gais Energy (BGE).

Sources said last night that while Blackstone was considering a new offer for BGE, no decision had yet been taken to formally re-enter the bidding process.

That auction process has become a struggle after a number of bidders pulled out of the race, leaving a bid led by Northern Ireland's Viridian, owned by Arcapita of Bahrain, and a bid from Canada's Brookfield, as the potential buyers.

That follows the withdrawal of Malaysia's state power company Tenaga National and the effective withdrawal of UK utility Centrica from the process.

It is understood that Blackstone has been invited back into the running in an attempt to shake up the competition, and hopefully lift the bidding.

If it happened, a deal for BGE would be the latest in a series of Irish takeovers for Blackstone, which took a controlling stake in Eircom last year, and owns assets here ranging from the Burlington Hotel to debt investment firm Harbourmaster.

A spokesman for Blackstone said the firm would not comment on speculation.

Bord Gais declined to comment on the sale process, other than to say it remained ongoing.

"The sale of Bord Gais Energy is ongoing. As this is a competitive and confidential process, the company is unable to comment further at this time," a spokeswoman said.

The sale itself is being overseen by the New Era unit of the National Treasury Management Agency (NTMA) and its advisers Royal Bank of Canada (RBC).

If a sale does go ahead, half the proceeds will be used to repay government debt with the rest earmarked for job creation initiatives under a deal hammered out with the EU/IMF.

The privatisation does not include the Bord Gais gas network.

BGE has three main operating areas. Its retail arm has 468,000 gas and 407,000 electricity customers.

Its trading unit is responsible for the procurement of gas, electricity and carbon, risk management, hedging and trading strategies and market modelling.

The sale also includes the 445MW Whitegate power station.

Irish Independent

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