Dáil Éireann debate -
Tuesday, 5 Nov 1991

Vol. 412 No. 1

Ceisteanna — Questions. Oral Answers. - Shipping Merger.

Ivan Yates

Question:

3 Mr. Yates asked the Minister for Tourism, Transport and Communications if he will outline the up-to-date position in relation to the proposed merger of the B & I Line and the Irish Continental Line; if he will give details of the discussions which have taken place between both parties in the months of July, August and September; if he has satisfied himself that adequate steps have been taken to seek the agreement of the employees of the B & I Line; and if he will make a statement on the matter.

Eamon Gilmore

Question:

51 Mr. Gilmore asked the Minister for Tourism, Transport and Communications if he will outline the latest position regarding the future of the B & I Line; if he is considering proposals for a management/staff buy-out; if he intends to approve this proposal; and if he will make a statement on the matter.

Minister for Tourism, Transport and Communications (Mr. S. Brennan)

I propose to take Questions Nos. 3 and 51 together.

Following representations made to me by the management of B & I and the B & I group of unions, I have decided to request my financial advisers, Stokes Kennedy Crowley Corporate Finance Ltd., to open negotiations with a view to receiving a fully comprehensive management staff buyout proposal. I have also instructed my advisers that negotiations with Irish Continental Group may take place at the same time. It would be inappropriate for me to provide details of discussions with any particular party.

Following conclusion of the negotiations a final decision will be taken by the Government. Arrangements for completion of the sale will be put in place immediately thereafter, including the introduction of the necessary legislation.

The level of consultation with trade union interests in relation to this sale is possibly unprecedented. To date, my Department have had approximately 20 meetings with trade union representatives, including the Irish Congress of Trade Unions, as well as numerous bilateral contacts. I have met trade union representatives on three occasions. I am, therefore, satisfied that the legitimate requirement for consultation with trade union interests has been fully satisfied in this instance.

I wish to remind Deputies that the Exchequer has invested £106 million in B & I Line since 1965 when it was acquired from the private sector by the State, including £53 million since 1985. Despite an improved trading result in the current year, the company still require substantial Exchequer financial assistance to meet their ongoing commitments.

SKC Corporate Finance Ltd. were appointed by me last year to examine the future options for B & I with the main objective of determining how soon the company's dependence on Exchequer financial support could be ended. Having assessed the feasibility and financial implications of a number of options, the consultants came out strongly in favour of the sale of B & I as the best option.

The Government's decision to sell their shareholding was strongly influenced by the fact that they do not have the resources for the continued heavy investment in the company which the consultants highlighted and which all parties concerned agree is necessary for their survival and continued development.

Mr. Yates

Will the Minister extend the time limit, which I understand is 8 November, for this staff buy-out offer to the end of this month? Will he accept that eight working days is simply not long enough for them to put together a suitable package? Will the Minister explain why a year ago he rejected a management staff buy-out and why he is now prepared to consider it? Will the Minister give an assurance to the House that whatever deal is made, the State will retain a golden share, that redundancies will be on a voluntary basis and that the maximum level of shipping services will be retained?

Mr. S. Brennan

I set the 8 November deadline because this has dragged on for a long time and I am anxious to have it finalised as a matter of urgency. As they can meet that deadline with a bit of effort, I propose to stick to the deadline, if possible. I will not be unreasonable, however, if on the day a few extra days are required. I did not reject the proposition, as such, a year ago. At the time we sought bids. Five bids were received, one of them a MBO. Consultants did not recommend that course of action but now we are giving them a second chance to make a bid for the company. That is reasonable. I am determined to see the sale of B & I through at the very latest by the end of this year, but I want to make sure that all sides have an equal opportunity.

Mr. Yates

Will the Minister answer my question, that whatever sale is concluded, the State will retain a golden share in view of the fact that 99 per cent of everything exported from this country goes by sea? Will he ensure that redundancies are on an agreed voluntary basis, as part of any sale?

Mr. S. Brennan

I cannot give the Deputy a guarantee with regard to a golden share. We discussed this with the trade unions at the 20 or so meetings we had with them. It is simply not practicable because it would mean the Government going back on their decision to effectively dispose of the line. I reject the notion of a golden share. With regard to redundancies, every effort will be made to ensure the least disruption and that any redundancies which are necessary are voluntary, but it would be foolish of me to guarantee that because most of that will be in the hands of the purchaser whether it be the MBO or Irish Ferries.