Government puts Bord Gáis sale on hold until 2012

THE Government is expected to hold off on a sale of Bord Gáis until next year.

The Cabinet decided earlier this week to sell a minority stake in the ESB in order to meet EU-IMF requirements.

An inter-departmental group will report back to the Cabinet by November 30 on how to proceed with the sale.

The Cabinet may also decide in the coming weeks to sell the state’s share in Aer Lingus.

However, it’s understood a decision on Bord Gáis won’t be taken any time soon, with the Cabinet yet to properly discuss the company’s fate.

Options include selling a minority stake in the company, similar to the ESB decision, or breaking it up and selling some parts of it.

However, a Cabinet source said ministers had got nowhere near that kind of detailed discussion on the company.

In addition, Bord Gáis is believed to have sought some breathing space to complete a number of projects before a sale is looked at. Talks have taken place between Government officials and Bord Gáis chiefs on the possibility of a sale but it is understood the company asked that any decision be delayed until the start of next year.

Yesterday Bord Gáis chief executive John Mullins said he met with Small Business Minister John Perry to discuss the sale of state assets.

The EU and IMF expect the Cabinet to raise at least €2 billion from the sale of assets in order to pay down debt. But the Cabinet is hoping to be allowed reinvest some of the proceeds into the economy and will seek negotiations with the EU and IMF on the issue.

Mr Mullins said he hopes that half of the proceeds from the sale of such assets would go into creating enterprise.

“It is going to be quite an interesting period in the sale of those assets,” he said, adding that state companies need to become more competitive.

The influence of external shareholders, according to Mr Mullins, will support their drive to becoming more competitive and he said it would also increase efficiencies.

Energy Minister Pat Rabbitte has described Bord Gáis and the ESB as “the jewels in the crown” among the state assets. They represent between 60%-70% of the value of all state assets.

Mr Mullins also said confidence in the economy is rising. “I think things are looking a bit brighter but it is vitally important that the Government addresses the fiscal deficit. It is vitally important that they go past the €3.6bn and go for the €4bn number.”

He added that the middle classes and enterprises have been “over-targeted” when it comes to cuts over the last while. “Raising taxes for people who are fundamentally unable to pay those taxes… is not a runner.”

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