Sunday 19 November 2017

Coalition prepares to tender for advisers on Bord Gais flotation

Thomas Molloy

Thomas Molloy

THE Government is set to tender for advisers to manage the flotation of Bord Gais Energy later this year or early next year.

The tender will pave the way for the biggest initial public offering since the privatisation of Eircom back in 1999 and generate millions of euro for Dublin's hard-pressed stockbroking and legal communities.

The National Treasury Management Agency, which is managing the sale of state-owned assets on behalf of the Government, will put up a detailed tender on the Government's tender website as well as tendering at European level. Investment bank Barclays Capital was hired by the NTMA earlier this year to advise on the sale options for Bord Gais but the work for the entire project must now be put up for tender.

The Government must sell state assets under the terms of the 2010 bailout deal which called on the State to raise at least €2bn from the sale of state-owned assets. Some of the money will be used for job creation schemes while the rest will be used to repay debt.

Units

Energy Minister Pat Rabbitte plans to sell Bord Gais Energy which buys gas and electricity on the wholesale markets, sells power to homes and businesses and operates energy plants. Solicitors William Fry estimates that the units will raise €1.5bn.

The State will retain ownership of the gas transmission and distribution systems and the two gas interconnectors which link the UK and Ireland. The Government is also considering the sale of the remaining stake in Aer Lingus and forests belonging to Coillte.

Managing a share offering is big business for the financial, legal and public relations advisers that help shepherd a company on to the stock exchange.

The flotation of Eircom cost the government of the day £80m (€101m) some 13 years ago. The flotation of Aer Lingus in 2006 was another bonanza for advisers with the State shelling out €18m.

The 1999 Eircom sale was led by Merrill Lynch and Allied Irish Bank with help from ABN Amro Rothschild, Dresdner Bank, Morgan Stanley Dean Witter and SG/Paribas.

The 2006 Aer Lingus flotation was managed by AIB Capital Markets and used AIB Corporate Finance and Goodbody Stockbrokers as global co-ordinators. Goldman Sachs and Merrion Capital advised Aer Lingus.

On the legal side, Arthur Cox advised Aer Lingus, while McCann Fitzgerald gave advice to the sponsors and William Fry advised the Government.

Irish Independent

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