Bloomberg News

Irish Trees Earmarked for Sale in 3 Billion-Euro State Sell-Off

February 22, 2012

Feb. 22 (Bloomberg) -- Ireland may sell timber, parts of its energy companies and a stake in airline Aer Lingus Group Plc to raise as much as 3 billion euros ($4 billion), as the country seeks to regain its economic sovereignty.

The government today detailed a plan to sell power stations and the energy unit of Bord Gais Eireann, and said it will consider the sale of assets belonging to state forestry company Coillte and its 25 percent stake in Aer Lingus.

Ireland has “made it abundantly clear that there will be no fire sales,” Brendan Howlin, the public expenditure minister, said today at a press conference in Dublin. “We want a good price. We are not going to short-change taxpayers.”

The European Commission, the European Central Bank and the International Monetary Fund demanded asset sales as a condition for Ireland’s 2010 bailout. Greece has been told to raise at least 50 billion euros by selling or renting state assets, while Portugal this month agreed to sell a 40 percent stake in REN- Redes Energeticas Nacionais SA for 592 million euros.

Irish Prime Minister Enda Kenny said in parliament he expects the sales to begin next year at the earliest. While the government dropped plans to sell a stake in the Electricity Supply Board, it will invite bidders for “non-strategic power generation capacity,” he said.

Airline Sale

Howlin said they will await improved market conditions before selling its stake in Aer Lingus.

The company’s 96 euro cents share price doesn’t reflect fair value for the Dublin-based carrier, he said. Howlin declined to comment on a possible sale of the stake to Ryanair Holdings Plc, which has made two failed bids for Aer Lingus.

The government won’t sell land belonging to Coillte, which owns more than 1 million acres, most of which is forested, according to its website. Coillte’s forestry businesses include log sales, farm forestry services, and plant sales.

As much as 1 billion euros of the proceeds may be invested in “jobs rich” investments, Howlin said, with the remainder earmarked for debt reduction. Ireland’s national debt was 119.4 billion euros at Jan. 31, according to its debt agency.

“The concern is that this money will be wasted on schemes that do not bring any economic benefit,” said Conall Mac Coille, chief economist at Dublin-based securities firm Davy. “A lot of economic literature shows that the benefit of government employment training schemes is close to zero. Maybe the money could be better spent just paying down debt.”

--Editors: Dara Doyle, Rodney Jefferson

To contact the reporters on this story: Finbarr Flynn in Dublin at;

To contact the editor responsible for this story: Colin Keatinge at

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