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Kenny discusses sale of state assets with Bord Gáis boss

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John Burke and Niamh Connolly - Sunday Business Post

Fine Gael leader and Taoiseach-elect Enda Kenny has met the chief executive of Bord Gáis, John Mullins, with whom he raised the issue of the sale of state assets.

Bord Gáis has confirmed that Kenny and Mullins met, as part of an engagement with Cork Chamber of Commerce, while he was on a constituency tour of Cork.

It also confirmed that the issue of the disposal of non-strategic state assets was raised by the Fine Gael leader.

According to industry sources, Bord Gáis is keen to explore a quick sale of its retail division. The company’s credit rating is directly linked to the state’s solvency rating, and there is concern that it faces a dramatic rise in its costs if there is a further deterioration in this.

Informed sources told The Sunday Business Post that Bord Gáis sees this as a priority ‘‘emerging issue’’ for the incoming government.

Centrica, the British energy company behind British Gas, has been closely examining developments, while Scottish and Southern Energy (SSE) is also understood to have discussed the possible opening up of the market with the departments of finance and energy in the build-up to the election.

A spokesman for SSE, which is the parent company of Airtricity, s aid the company ‘‘did not comment on market speculation’’ in relation to the content of its meetings with the departments.

Kenny was accompanied at the meeting with Mullinsby local TD Simon Coveney, while the Chamber of Commerce was represented by its president Ger O’Mahoney, chief executive Conor Healy, secretary David Power and policy officer Alma Murnane. Mullins is the incoming vice-president of the chamber.

A spokesman for Bord Gáis confirmed the meeting but said that, when Kenny raised the issue of the sale of state assets, Mullins ‘‘did not engage’’.

Mullins said the meeting was organised to discuss a range of issues linked to business and job creation in Cork.

He said any policy on the disposal of Bord Gáis was a matter for the government and for the board of the company to implement.

Bord Gáis is currently severing its network and retail divisions under the terms of the EU’s third energy directive. Attention is now shifting to the future of the employee share ownership plan’s (ESOP) stake in the state agency.

Under the terms of an EU directive, Bord Gáis staff would be unable to retain a beneficial interest in the newly-separated retail company.

This raises the prospect of a possible windfall for employees if the state is forced to buy out the ESOP’s stake.