Thursday 22 March 2018

NTMA seeks financial adviser to plan sell-off of Bord Gais Energy

John Mulligan

John Mulligan

THE National Treasury Management Agency (NTMA) is seeking a financial adviser to help it plot the sale of the Bord Gais Energy (BGE) arm.

New Era, the unit of the NTMA that manages the Government's stakes in semi-state companies, launched a tender process yesterday. The successful advisory firm is expected to help the agency establish an "agreed timeline and set of Government objectives" for the planned sale.

The advisory will also have to provide ongoing advice on the estimated value of BGE and "analysis of market conditions/purchaser appetite, including advice as to timing and appropriateness of implementing the transaction".

The intended sale of the gas business, which won't include the network infrastructure, is part of the Government's wider plan to dispose of €3bn worth state assets. Other assets earmarked for sale include the State's 25.1pc stake in Aer Lingus, Coillte's assets, excluding its land banks, and some ESB assets.

The BGE business being put up for sale could be worth anywhere between €1bn and €1.4bn.

The tender document specifically notes that the sale won't include BGE and its subsidiaries, including Bord Gais Networks and Gaslink. These firms own and operate BGE's gas transmission and distribution systems and gas interconnectors and will remain in state ownership.

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, as was portfolio optimisation, risk management, hedging and trading strategies and market modelling.

Its assets include the 445MW Whitegate power station as well as 234MW of operational wind assets and 460MW of wind-energy assets in development.

Last year, BGE reported revenue of €1.33bn and earnings before interest, tax, depreciation and amortisation of €44.3m.

To be considered for the tender process, financial advisory firms must have generated at least €10m in annual revenues in each of the past three years and also have extensive experience in the sale of state assets or energy companies.

Barclays Capital had previously been hired by the NTMA to advise on sale options for Bord Gais.

BGE will also hire its own advisers. The NTMA said the closing date for receipt of tenders is August 20.

Irish Independent

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