Vol. 468 No. 4
932 Mr. S. Brennan asked the Minister for Transport, Energy and Communications when a final deal will be signed with KPN/Telia; the difficulties, if any, that have been encountered in the negotiations; and if he will lay a fully copy of the contract and related documentation in the Library of the Houses of the Oireachtas. [15646/96]
On 26 June the Government decided to approve the commencement of exclusive negotiations with KPN/Telia. Since then negotiations on the outstanding issues have progressed satisfactorily and it is expected the deal will be signed within the timeframe envisaged.
Due to reasons of commercial confidentiality it will not be possible to undertake full disclosure of the transaction documents. It is intended however, following discussion and agreement with the partners, to make public certain of the more significant provisions of the transaction at the time of a formal cermony launching the strategic alliance in September.
933 Mr. S. Brennan asked the Minister for Transport, Energy and Communications the rights held by KPN/Telia in relation to the final pricing of the stake in Telecom Éireann; his views on the inbuilt incentive in the deal for KPN/Telia to restrict the development of Telecom Éireann for a number of years; and if he will make a statement on the matter. [15647/96]
KPN/Telia will acquire an initial 20 per cent of the total outstanding shares of Telecom Éireann for £182.86 million together with an option to acquire a further 15 per cent of the shares, three years after closing of the deal, for £200 million. There will also be a sharing with the State three years from closing of the increase in value above a certain threshold rate on the strategic partners initial 20 per cent investment and on the cost of the option shares if the option is exercised.
The value of the strategic partners investment at that time will be determined either by way of public offering of some or all of the shares which are subject to the option or by way of an independent valuation. KPN/Telia are not obliged to exercise their option but it will be in their interest to do so if the valuation of the company shares in three years time exceeds the option price.
This deal is structured so as to provide an incentive for all parties to accelerate the development of Telecom Éireann and there is no question of KPN/Telia having any incentive or motivation to restrict the development of the company. On the contrary KPN/Telia, through their extensive financial investment and an agreement to provide strategic support contributions, are committed to assisting in this transformation process which will ultimately enhance the value of their initial stake and consequently provide them with an opportunity to realise further enhanced value through the exercise of their option shares.
