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Dáil Éireann debate -
Thursday, 25 Jul 1996

Vol. 468 No. 4

Written Answers. - Proposed Sale of Telecom Éireann.

Seamus Brennan


913 Mr. S. Brennan asked the Minister for Transport, Energy and Communications the estimated final cost of the consultants assisting with the strategic alliance sale of shares at Telecom Éireann; the name of the consultants concerned; and their role in the project. [15191/96]

The estimated final cost of the consultancy for the strategic alliance is £2.95 million plus VAT and expenses of up to £50,000 per month for the duration of the project. The consortium of consultants is led by investment bankers Morgan Stanley. It also includes legal advisers Skadden, Arps, Slate, Meagher and Flom and telecommunications strategic advisers Arthur D. Little.

The role of the consultants is to assist the Department of Transport, Energy and Communications and the Department of Finance in the negotiation and conclusion of the alliance, including the finalisation of transaction documents. The consultants advise on all aspects of the alliance process including financial,-legal, regulatory and strategic considerations.

The consultancy fee is likely to represent less than 1 per cent of the proceeds likely to ultimately arise from the transaction. This is significantly less than the charge likely to arise from a more straightforward flotation or placement. The consultants are also assisting the company thereby avoiding very significant expenses involved in the retention of separate advisers.

Seamus Brennan


914 Mr. S. Brennan asked the Minister for Transport, Energy and Communications if he will confirm that the legislation on the sale of 20 per cent shares in Telecom Éireann will be introduced by the end of 1997; whether he intends to sign a contract on this sale within 30 days as announced; whether this contract is subject to legislation, and the reason a discrepancy, if any, arises in this regard. [15192/96]

On 26 June last the Government chose a consortium of KPN and Telia as the strategic partner for Telecom Éireann and entered into exclusive negotiations with them. These discussions are virtually completed and it is envisaged that the transaction documents will be signed within the time limit agreed.

Following signature, a number of conditions must be satisfied before the deal can be closed. One of the closing conditions is the enactment of the Telecommunications (Miscellaneous Provisions) Bill which will include provisions permitting the sale of shares in Telecom as envisaged in the transaction documents and will include appropriate provisions for worker directors.

This legislation will be introduced in the Oireachtas in the early autumn. A second Bill to provide for a general reform of telecommunications legislation for a liberalised market is envisaged for later in 1997. It is expected that this Bill will also include provisions arising out of and impacting on the strategic alliance.