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Bord Gais hopes to sell energy arm by year's end

THE sale of the Bord Gais Energy (BGE) business could be completed by the end of the year, parent Bord Gais Group said as it announced pre-tax profits of €120m for 2012.

Profits were boosted by a strong underlying performance, management said, as well as by savings thanks to successful refinancing of some debt and a revision of the group's pension scheme.

In its annual report, Bord Gais said it paid a dividend of €23.8m to the Government for 2012. That was down from €33m in 2011 despite a 29pc rise in profits over the same period.

Those payouts are set to be dwarfed in the coming year, however, by the sale of BGE, which includes the company's electricity generation assets such as windfarms as well as the well-known Bord Gais retail business that sells gas and electricity to consumers. The unit is expected to fetch in the region of €1bn to €1.5bn and is being sold under orders from the troika of bailout lenders.

Half the proceeds raised will go to repay a share of the national debt while the rest has been earmarked by the Government to be ploughed into job creation schemes.

In its annual report, Bord Gais said the sale process, which kicked off in February, could be concluded by the end of 2013, depending on market conditions. The company has hired Royal Bank of Canada (RBC) which has a particular focus on energy deals to sell the unit and the sale process is also being overseen by the State's NewEra asset disposal unit, the Department of Public Expenditure and Reform, the Department of Finance and the Department of Communications.

Revenues at Bord Gais increased marginally to €1.6bn in 2012, but are likely to fall sharply following the sale of BGE.

However, the group is currently setting up the new national water company authority that will eventually be responsible for collecting household water charges.

The company has been told to have everything in place to start billing households for water usage by January 2014, it said in its annual report.

However, the Government has not yet told the agency when it wants billing to begin, the report stated.

Phased

The new Irish Water utility is to be established on a phased basis between now and 2017 and will take responsibility for water supply and wastewater treatment from 34 local authorities around the country.

Bord Gais was selected to run the water authority because of its experience in raising private capital and in managing customers, the report said.

In a measure of the stress customers are under, however, the results show that almost 95,000 customers are in arrears on their utility bills out of a total of 850,000.

And 15pc of customers now have "pay as you go" meters installed.

Irish Independent