Business Irish

Sunday 19 November 2017

Few corporate bosses have an appetite for semi-State sell-off

Roisin Burke

IRISH business owners won't be rushing out to buy shares in semi-State companies, if there is to be a sell-off.

Asked if they would invest in shares in ESB or the Dublin Airport Authority (DAA) if they floated, a massive 75 per cent of company bosses said they wouldn't buy either.

There was more interest in ESB stocks, which 18 per cent of owners said they would buy on a float, compared to only 3 per cent who would opt for shares in the DAA. A mere 4 per cent would buy in both.

Economist Colm McCarthy has been tasked by Finance Minister Brian Lenihan with vetting what State companies might make lucrative sell-off targets ahead of the Budget in December. The distinct lack of appetite for stakes in two of the biggest semi-State companies might date back to the rather unhappy Eircom float in the Nineties.

Some 500,000 people bought the much-hyped former State telecoms shares, only to get burned when the price plunged.

Other State commercial assets that could be flogged, either altogether or in parts, include Bord Gais, the national ports, CIE, An Post, Bord Na Mona, Coillte, the National Lottery and VHI. All are being considered, according to the Department of Finance.

RSA insurance's €65m purchase of Irish insurer 123 Money might mean there's an appetite for a company like State insurer VHI. Meanwhile, Communications Minister Eamon Ryan has said RTE's transmission network might be put up for sale.

State energy giant ESB is worth an estimated €5bn, while Bord Gais has been valued at around €3.5bn.

In this climate, many State firms are carrying large debt or pension deficits, or indeed both, which could dent their saleability.

Whatever happens, it won't be a quick way to make a buck for the Government in most cases, with protracted union negotiations a given ahead of any deals.

Sunday Independent

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