Brian O'Shea
Ceist:22 Mr. O'Shea asked the Minister for Public Enterprise if she will defer the flotation of Telecom Éireann in view of the recent resignations of the chairman and vice-chairman of the board. [9295/99]
Priority Questions. - Telecom Éireann Flotation.
I am satisfied the preparations for the forthcoming flotation are well in hand and I am confident the process is copperfastened.
The initial public offering, IPO, will be publicly launched in late April and I anticipate the company will be successfully listed as planned.
I refer the Deputy to my reply to Questions Nos. 14 and 65 of 18 February 1999, which outlines the position regarding the planning and preparation process for the initial public offering. That was taken a stage further yesterday evening by the completion of Report Stage of the relevant Bill. I said I would come back to the Dáil to give a full account of our position in this regard.
I am sure the Minister will agree my amendment which, subject to redrafting, she agreed to accept last night, will bring an important element of public accountability to the process, as she will have to come back to the Dáil to outline the general principles of the sale. Does she believe damage has been done to investor confidence by the recent resignations of the chairman and vice-chairman of the board? Is she satisfied the board is not in disarray? Is April not a little to soon in terms of gauging how the investors will react to these recent traumatic events?
The Deputy referred to those events as traumatic. I would not refer to them as such. They were traumatic in the sense that we had to make many quick decisions in a short time. That was traumatic for the person dealing with the matter. I am assured by the advisers that will not cause damage to investor confidence and that we can look forward to a successful flotation. We had a substantial discussion on this matter yesterday. I was not prepared to stand over any conflict of interest, however small it might be, and neither was the ex-chairman. Even though he had hoped it could be managed, although not in a maligned way, the advisers and I believed that could not be done. It was proper that this was explained fully to the chairman and he accepted that. I recall with great warmth his work for the country and thank him for it, and the same applies to the work of the vice-chairman. I did not speak to him, he wrote to me. He did not give any reason for his resignation. He merely stated he was resigning. In that regard, I can pick up only what I read in the newspapers.
The Minister informed us a number of times during the debate on Committee and Report Stages that she had not reached a final decision on the percentage of shares that would be sold in this tranche. Have her ideas become firm in the interim? Will she recommend to Government proceeding by way of issuing one or two tranches of shares?
I have not made up my mind. This will be a Cabinet decision, but I will make recommendations. I do not have a firm view on this. I got advice which recommended proceeding by way of two tranches and that the shares would increase in value afterwards, but I do not know if that will happen. I am of the opinion that proceeding by way of issuing two tranches of shares would provide two chances for the advisers to be part of the process. I have not made a final decision or gone to Cabinet on this matter. It was a good day for the Oireachtas when the amendment was accepted. I will report back to the Dáil on the further steps we will take and on other amendments to that Bill.
If two tranches of shares are issued, would that mean the highly paid advisers would have another bite of the cherry?
That is exactly what I am beginning to wonder. All those matters will be probed. Having checked the earlier two flotations, which were public offerings although they were small by nature, it appears that after the first tranche of shares were issued, their price increased dramatically, which would leave one in a better position. I have not made a firm decision on this matter or on the appropriate fees, if there were a separate tranche. All these issues are firmly fixed in my mind for further reflection.