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Ireland to Sell 80Yrs of Harvesting Rights To Its Forestry, To Save 3 Weeks Of Interest Repayments

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As a condition of the IMF/ECB/EFSF “Troika”  loan for the amount of  €67.5bn Ireland must generate €2 billion from the disposal of State-owned assets and companies. As part of this, the government has plans to sell off the harvesting rights to the states forestry for the next 80 years.

The proposed €600 million that they will receive would pay off 0.4% of the national debt currently standing at €140bn, or to put it another way, 3 weeks loan interest on the national debt.  The Irish Timber Council said the proposed sale could lead to the closure of all ten of Ireland’s sawmills with the loss of 2,500 jobs. Coillte the public body in charge of the forests which accounts for 7% of the landmass of Ireland employes over 12,000 people whose jobs are at risk. The amount raised would potentially be only half of what the country would lose in lost earnings, redundancies and costs of replacing the trees.

How ironic that Labour, one of the government parties looks to have backtracked on another promise. In their election manifesto (p36) , Labour had a commitment to forestry as follows

labour

 

Thank you IMF 😦

IMF-and-debt

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IMF Continues To Asset Strip Ireland

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When Ireland announced that the IMF was being called in to provide assistance via a bailout program, the first thing that hit my mind was what were they after. We know from economic hitmen like John Perkins that the IMF leaves a country so hocked up in debt that it has to sell of its assets. Skills that were developed in Africa and South America are now coming to Europe. Ireland has already announced what is to be stripped as agreed to with the IMF and now one of the most profitable companies(Bord Gais) is about to floated.

When Ireland floated the national telephone company (Telecom Eireann) in 1999 now called eircom, it turned out to be a disaster. The employees were given 15% of the company as a sweetener not to strike and block the floatation thus denying further revenue for the state. The IPO price was way to high, causing many Irish investors (entire country encouraged to get involved) to lose their shirts. Then after a series of companies took it over including Vodafone, the company was asset stripped and now finds itself bankrupt.

So what can we expect? Well the irish taxpayer will get screwed, the asset will be floated or sold at the worst possible time, foreign companies will take advantage to strip it and finally the taxpayer will be left to pick up the pieces minus a great asset that pays a dividend.

 

THE Government is set to tender for advisers to manage the flotation of Bord Gais Energy later this year or early next year.

The tender will pave the way for the biggest initial public offering since the privatisation of Eircom back in 1999 and generate millions of euro for Dublin’s hard-pressed stockbroking and legal communities.

The National Treasury Management Agency, which is managing the sale of state-owned assets on behalf of the Government, will put up a detailed tender on the Government’s tender website as well as tendering at European level. Investment bank Barclays Capital was hired by the NTMA earlier this year to advise on the sale options for Bord Gais but the work for the entire project must now be put up for tender.

The Government must sell state assets under the terms of the 2010 bailout deal which called on the State to raise at least €2bn from the sale of state-owned assets. Some of the money will be used for job creation schemes while the rest will be used to repay debt.

Energy Minister Pat Rabbitte plans to sell Bord Gais Energy which buys gas and electricity on the wholesale markets, sells power to homes and businesses and operates energy plants. Solicitors William Fry estimates that the units will raise €1.5bn.

Interesting that one of the assets for sale is Coillte (national forestry) which owns 7% of the state. Former Taoiseach (Prime Minister) Bertie Ahern had a massive study into what minerals etc were under the land. He refused to have the study published so he obviously know where the “good stuff” is. Guess who is chairperson of the International Forestry Fund, which has expressed an interest in buying Coillte lands should they come on to the market. You got it, Bertie Ahern. Hmm, a cynic might say that he compiled the study a few years before things went bad, putting himself in a great position to take advantage, bearing in mind he never published the study.

The State will retain ownership of the gas transmission and distribution systems and the two gas interconnectors which link the UK and Ireland. The Government is also considering the sale of the remaining stake in Aer Lingus and forests belonging to Coillte.

Managing a share offering is big business for the financial, legal and public relations advisers that help shepherd a company on to the stock exchange.

The flotation of Eircom cost the government of the day £80m (€101m) some 13 years ago. The flotation of Aer Lingus in 2006 was another bonanza for advisers with the State shelling out €18m.

The 1999 Eircom sale was led by Merrill Lynch and Allied Irish Bank with help from ABN Amro Rothschild, Dresdner Bank, Morgan Stanley Dean Witter and SG/Paribas.

Source: Irish Independent

Trokia Start Asset Strip Of Ireland

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Ah well, it was only a matter of time, but today was officially announced by Minister for hardshipReform, Brendan Howlin that Ireland would begin the process of selling off the crown jewels. They hope to raise in the region of €3 billion. When you put that in context,  Ireland currently owes €120 billion, so its it won’t make the slightest dent in the banker’s bill that Ireland has been handed. And saving the best for last, they would not be sold off cheaply but would start to be sold next year. As if things are going to get better 😉 The following were announced by the minister:

THE GOVERNMENT is planning to sell off parts of the ESB and Bord Gais in a bid to raise €3bn – €1bn of which will be put towards job creation.

Stake in National Electricity and Gas companies

However, the strategically important networks of both companies, which carry gas and electricity, will be remain in State control.
In the case of Bord Gais, the company’s energy business, excluding its gas transmission and distribution systems and two gas interconnectors, are for sale.
Some of ESBs non-strategic power generation capacity has also been put on the block but the Government has held back on selling a minority stake in the firm.

National Forestry

Other sales include some forests owned by Coillte but not the land on which they are planted.

Stake in National Airline

In addition, the remaining state-controlled stake in Aer Lingus will be sold when conditions are favourable and the stock market price is acceptable to the Government.

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