As was announced back in – December the privatisation of Bord Gais Energy has now been agreed and is expected to be completed before July 2014.
British firm Centrica – owners of British Gas – has finally agreed to buy the gas and electricity supply arm and a gas-fired power plant from Bord Gais Eireann for €1.1 billion. Initial government targets for the sale were close to €1.5 Billion.
The deal includes the 45-megawatt Whitehead gas-fired power station.
Originally – all the bids were rejected (More Here) in November because they were too low but Centrica’s became the preferred bidder in December 2013.
“All Bord Gais Energy staff will transfer to the new consortium,” Bord Gais said in a statement.
Recent Bord Gais figures show that turnover grew by 5% to €1.608 billion and earnings before interest and tax increased by 4% to €343m. Profit before income tax was €94m . Bord Gais paid a dividend of €33.1m to the exchequer in 2011.
The sale will mean that about 1,000 members of the employee share ownership plan (Esop) at Bord Gais Energy will receive tax-free payouts averaging €54,000 each, with some staff receiving as much as €66,000.
The sell off of Bord Gais Energy is part of the recovery plan for Ireland as agreed with the IMF and ECB . Other assets being sold off include the National Lottery and “non strategic” assets of ESB.
Centrica are doing the deal as part of a consortium with Brookfield Renewable Power Inc and iCON Infrastructure.
Brookfield Renewable Power is a Canadian-based firm specialises in investing in renewable energy suppliers and developers.
Icon Infrastructure is an independent investment firm, focussing on privately held investments in infrastructure assets in Europe and North America.
Centrica’s profits in British Gas fell by 6% in 2013 after it lost 362,000 customers over the year.
Bord Gais Energy currently have their residential gas prices regulated by the CER – but this is expected to end in the next few months . It can’t happen until the Bord Gais market share drops to 55% (it is currently 56.88%) . Based on switching trends – this should happen before July. So it will be a time of big changes fro Bord Gais Energy this summer!