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Company Sale.

Dáil Éireann Debate, Tuesday - 30 November 2004

Tuesday, 30 November 2004

Questions (66)

Kathleen Lynch

Question:

93 Ms Lynch asked the Minister for Communications, Marine and Natural Resources the details concerning the amount of money which has been received following the sale of the Irish National Petroleum Corporation to a company (details supplied) in July 2001 for €117 million; the reason the State has only received €20 million to date; the details of the environmental claims and contractual disputes that are holding up the payment of a further €10 million; his views on whether the money received for the sale of these INPC assets amounts to little more than a pittance; and if he will make a statement on the matter. [31254/04]

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Written answers

It is estimated that the final net return to the Exchequer arising from the sale of the business and commercial assets of the Irish National Petroleum Corporation, INPC, will be in excess of €30 million. The INPC has paid €20 million to the Exchequer.

In November 2003, the board of the INPC, cognisant of its obligations under the Companies Acts to retain sufficient assets to meet potential liabilities, determined that it would not be appropriate to make a further payment to the Exchequer at that stage as a number of outstanding matters have still to be resolved.

These ongoing matters, comprising of environmental claims lodged against the INPC and a contractual dispute with a former customer, have potential financial implications and, consequently, the INPC is not currently in a position to divest itself of its remaining financial assets. As the claims and the dispute are day-to-day matters for the INPC, it is not appropriate for me to elaborate further on them. However, they are being robustly defended by the INPC, with the benefit of expert legal and technical advice.

Given the involvement of third parties in the unresolved matters, neither the INPC nor my Department is in a position to indicate when the remaining proceeds may become available.

It has always been accepted that the total cash return to the Exchequer arising from the INPC transaction would be considerably less than the headline sale price of US$100 million as the INPC had, for example, to use some of the proceeds to discharge the company's debt. Contrary to the impression that appears still to persevere, the purchaser of the facilities paid over the full amount due to the INPC in July 2001.

I am satisfied that the transaction represented a very positive outcome for the State, particularly having regard to the fact that the Government also placed an obligation on the private owners to operate the facilities for a period of at least 15 years as a condition of the sale.

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