Pat Rabbitte
Question:14 Mr. Rabbitte asked the Minister for Public Enterprise if she will give an up-date on the sale of Government shares in Telecom Éireann; and if she will make a statement on the matter. [4639/99]
Written Answers. - Telecom Éireann Shares.
Ivor Callely
Question:65 Mr. Callely asked the Minister for Public Enterprise the position regarding the sale and disposal of shares in Telecom Éireann; and if she will make a statement on the matter. [4663/99]
I propose to answer Questions Nos. 14 and 65 together.
The planning and preparation process for the initial public offering of shares in Telecom Éireann is making good progress in my Department.
Subject to market conditions, the IPO is planned for around the middle of this year.
I have set a number of very particular objectives for the Telecom Éireann IPO, as follows: to maximise the proceeds to be returned to the Exchequer; ensure a successful IPO; promote wider share ownership and ensure value for money on expenditure related to the sale.
A steering committee chaired by my Department and also representing the Department of Finance and the company and assisted by advisers is meeting regularly to ensure that this major undertaking remains on track. They are working diligently on the many different and important tasks that need to be completed in the coming months. These include legal, management and business due diligence; preparation of the company business plan; preliminary valuation exercises; corporate governance issues; prospectus drafting; issues concerning overall size and structure of the IPO; preparations for research analyst presentations; banks syndicate structure; planning for the domestic retail offer; liaison with the strategic partner, the unions and the employee share ownership trust company.
A number of the key decisions relating to the IPO such as the overall size of the offer, the struc ture of the offer and the offer price will not be taken until much closer to the IPO date.
At present, the State has an 80 per cent shareholding in Telecom Éireann, while the strategic partners, KPN/Telia, hold a 20 per cent stake which they acquired in 1996. KPN/Telia also have an option to acquire a further 15 per cent shareholding by the end of this year. In the context of the IPO, my Department is currently engaged in discussions with KNP/Telia in relation to their intentions regarding their 15 per cent option and in relation to other relevant matters in connection with the IPO. In March of last year, agreement was reached with the unions representing the employees in Telecom Éireann on an Employee Share Ownership Plan, ESOP, under which a 14.9 per cent shareholding will be transferred to an Employee Share Ownership Trust, ESOT. The current target date for implementation of the ESOP is end March 1999.
I am also in discussion with the union coalition in Telecom Éireann on the issue of board composition.
Under the Postal and Telecommunications Services (Amendment) Bill, which is currently before this House, the State will be permitted to reduce its shareholding to a minority stake in the company and as I said earlier, the extent to which the State reduces its shareholding will be decided closer to the time of the IPO.
As one of my key objectives for the IPO is to promote wider share ownership in the country, I can confirm that a significant dedicated tranche of the shares will be available for citizens. The Irish people have contributed much to the development and success of Telecom Éireann over the years and they are entitled to share in the benefits of that success by being given the opportunity to participate in the flotation. I cannot say at this stage what the precise size of the retail tranche will be as this will depend on a number of factors which will not be determined until much closer to the IPO date such as the overall size of the offer and the level of demand from both retail and institutional investors.
A major advertising campaign is planned in the run up to the IPO to facilitate the general public in acquiring shares. At this stage, plans also allow for listing Telecom Éireann's shares on the Dublin, London and New York stock exchanges.