Dáil Éireann díospóireacht -
Tuesday, 11 May 1993

Vol. 430 No. 5

Written Answers. - Sale of Government Shares.

Pat Rabbitte

Ceist:

49 Mr. Rabbitte asked the Minister for Finance the total amount of revenue raised by the recent sale of his shares in Irish Life and Greencore; the purpose for which this revenue will now be allocated; the total amount paid by way of fees or other remuneration to stockbrokers or other consultants arising from these sales; if he has any plans to sell any other shares he holds on behalf of the public; and if he will make a statement on the matter.

Bernard J. Durkan

Ceist:

85 Mr. Durkan asked the Minister for Finance the total realised from sale of State assets since 12 January 1993; their value at the price of sale; their current value; the way in which he intends to spend the proceeds; the heading or headings under which it is proposed to spend the funds in question; and if he will make a statement on the matter.

Bernard J. Durkan

Ceist:

86 Mr. Durkan asked the Minister for Finance if the disposal of State assets is in accordance with the Programme for a Partnership Government 1993-1997; the totals realised so far from such disposals; the use to which it is intended to put such proceeds; and if he will make a statement on the matter.

Bernard J. Durkan

Ceist:

87 Mr. Durkan asked the Minister for Finance if the method of disposal of Greencore shares was in accordance with the Programme for a Partnership Government 1993-1997; and if he will make a statement on the matter.

Thomas P. Broughan

Ceist:

93 Mr. Broughan asked the Minister for Finance if, in view of the performance by the Government's stockbrokers, he will give the sum he now expects to realise from the sale of Greencore shares; the likely effects of the Irish Life and Greencore sales and expected tax buoyancy on the 1993 out-turn.

Minister for Finance (Mr. B. Ahern)

I propose to take Questions Nos. 49, 85, 86, 87 and 93 together.

A total of 55 million shares in Irish Life were sold, bringing revenue of £104.5 million. This price was equivalent to £1.90 per share, a discount on the market price at the time of 5 per cent. The price in recent days has been around this level, or a little below. The cost of the sale was £45,000 plus VAT. The Government's remaining shares in Greencore were placed on 30 April, realising net revenue of almost £70 million.

The circumstances of this transaction were debated in the House on Thursday last and I made a public statement on 7 May. Until inquiries by the Stock Exchange are completed I do not wish to say anything further on the matter.

I can confirm that the sale will now be completed, and that estimated proceeds of £69,872,459 will be realised and will be lodged to the account of the Exchequer on the due settlement date, 17 May. The price at placing on 30 April was £2.75 per share, representing a discount of just under 7 per cent on the market price of £2.95 at the time. This is the usual practice in a substantial placing. The price this year has moved between £2.38 and £3.16.

Total fees of £175,000 were agreed with Davy's who arranged the placing of the shares. In addition commission of £550,000 was initially agreed as payable in respect of S. G. Warburg's participation in the placing. I can confirm that no commission will now be payable on the transaction and that Davy Stockbrokers have waived their fees.

As I indicated in my Budget Statement, I set a target of £150 million for asset disposals this year, which was included in the budget arithmetic. This money goes to reduce the level of Exchequer borrowing and is not allocated to particular expenditure headings. There are no plans at present to sell other shares which I hold on behalf of the public.

The Programme for a Partnership Government 1993-97 states that we will implement the principles regarding State enterprise set out in the Programme for Economic and Social Progress. The relevant section of the Programme for Economic and Social Progress says that change in the ownership structure of particular State companies will only take place if it is in the public interest and in the best interest of the company and its employees. I believe that these conditions have been fulfilled in the case of Irish Life and Greencore.

As I mentioned earlier the budget arithmetic assumed asset sales would yield £150 million this year. The sales of the Irish Life and Greencore shares have in fact produced over £20 million more than that, but in the context of the budgetary totals for the year that is not a large figure. However, there is every reason, at this stage, to expect budget revenue targets to be met.