Bids for Bord Gáis Energy likely in coming weeks
Company to issue information memo to likely suitors by the end of this month
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The first round of formal bids for Bord Gáis Energy are likely to be made in coming weeks as the State moves to sell the company as part of an asset disposal programme agreed with the EU/IMF troika.
Following the publication of 2012 results showing that the group grew profits by 30 per cent to almost €121 million, its finance director, Michael G O’ Sullivan, confirmed that it will be issuing an information memorandum, detailing what exactly is up for sale, to likely suitors by the end of this month.
That will mark the formal beginning of a sales process that both the group itself and its shareholder, the Government, hope will be completed at some point later this year.
Mr O’Sullivan did not speculate about possible bidders’ identity, but said that he expected that it would be a mix of industry players and possibly private equity funds.
He added that there were “no surprises” on the list of those who had expressed an interest in buying the business.
Earlier yesterday the Minister for Communications, Energy and Natural Resources, Pat Rabbitte, said that he expected the sale to begin in the coming weeks.
The State is selling the energy business, which supplies electricity and natural gas to consumers and businesses, and whose assets include a modern gas-fired power plant which it built at a cost of over €400 million and wind farms with the capacity to generate more than 270 mega watts of electricity.
It is keeping the networks company, which owns and manages the country’s natural gas distribution systems, as these are considered to be strategically important assets.
Bord Gáis hired Royal Bank of Canada to advise on the sale and last month appointed Scotland to aid it in re-organising its capital structures, including its €2.2 billion debt, which will have to be divided between the energy and networks businesses.
Mr O’Sullivan acknowledged that the distribution of those liabilities could have an impact on the price that the State will ultimately get for the energy business, but he also said that the Government was keen to ensure that Bord Gáis Networks is not left with unsustainable levels of debt.
The group yesterday reported that revenues last year grew by 1 per cent to €1.625 billion while the group’s businesses earned pre-tax profits of €120.5 million 30 per cent more than the €94.3 million it made in 2011.
A once-off gain of €43.3 million boosted total pre-tax profits for the year to €163.8 million.