Willie Penrose
Question:32 Mr. Penrose asked the Minister for Public Enterprise the percentage of Telecom Éireann shares which will be floated on the stock exchange; and if she will make a statement on the matter. [12851/98]
Written Answers. - Telecom Éireann Share Sale.
Pat Rabbitte
Question:35 Mr. Rabbitte asked the Minister for Public Enterprise the Government's proposal, if any, for the future ownership structure of Telecom Éireann; the consultation, if any, there has been or will be with the unions in relation to these proposals; and if she will make a statement on the matter. [12746/98]
I propose to take Questions Nos. 32 and 35 together.
As the House will be aware, I recently announced that there will be an initial public offering — IPO — for the sale to the public market of a tranche of the State's shares in Telecom Éireann next year. KPN/Telia, who acquired a 20 per cent stake in Telecom Éireann in 1996 for an initial payment of £183 million, have an option under the shareholder's agreement to acquire a further 15 per cent shareholding for £200 million by end 1999. The final price to be paid for the initial 20 per cent and for the further shareholding of 15 per cent will be settled in the context of an IPO price. IF KPN exercise its full option, the level of State ownership in Telecom Éireann would then stand at 50.1 per cent with the balance split between KPN/Teila — 35 per cent — and the employees ESOP — 14.9 per cent. The planned IPO of a further tranche of State shares in the company will result in a minority shareholding position for the State.
Preparing for, organising and executing an IPO is a major undertaking which will require expert consultants to advise on financial and other matters in relation to the share sale. My Department has already advertised in the Official Journal for financial and legal advisers and it is expected that those advisers will be appointed by the end of July.
The appointment of the advisers will clear the way for in-depth consideration to be given to the details of the IPO such as the number of shares to be covered by the offer, the structure of the offer and its precise timing. At this stage, it is anticipated that the IPO will take place around mid-1999. Preparatory work on the necessary legislative changes, including revision of the regulatory framework and corporate governance arrangement necessary to effect the IPO, are already under way in my Department and it would be my intention to bring proposals to Government for amending legislation in the autumn and, if possible, introduce such legislation in the Oireachtas before the end of the year.
The Deputy will be aware that I had extensive discussions with the unions in relation to the ESOP in Telecom Éireann. In keping with the spirit of social partnership, it is my intention that the unions in Telecom Éireann will also be consulted on this matter. The Telecom Éireann share offer next year will be the first offering of shares in a major public utility and I am confident that it will prove to be a great success for all the parties involved including the company itself, the employees as shareholders, the customers and the Exchequer.