Government should consider IPOs for State assets - ISE CEO
The Government should consider stock market flotation’s as part of its disposal strategy for State assets, the ISE said today.
Deirdre Somers, the chief executive of the ISE, said an initial public offering (IPO) of shares in State companies can offer substantial benefits such as public participation in ownership of these assets, as well as the flexibility to allow the Government to retain an element of equity ownership and control.
“Democratizing the state asset disposal agenda, by giving the Irish public an opportunity to participate in the future of such important companies, is the right thing to do,” said Ms Somers.
"The plan to dispose of Bord Gais Energy to a trade buyer offered no investment opportunity for potential retail investors. State assets are ideal candidates for IPOs that would allow retail investors opportunities on an equal footing with institutional investors.”
Ms Somers added: “The Government seems to think at present that the only option for any assets within State control is to sell to the highest bidder. This is not the case.”
“By opting for an IPO, it could retain an equity stake – either a majority stake or a minority stake – and continue to receive dividends over the long term from the profits generated by the company for years to come.”
Ms Somers also said there is substantial interest in Ireland from overseas investors and that Ireland needs more product to meet the appetite of these investors.
“The Irish market is the most accessible and public ‘shop window’ in the world for international investors looking for Irish product. Our national priority must be to ensure that, now we have investors wanting that product, we have enough to sell,” she said.
She added: “We were delighted to see two new companies – Mincon and Game Account Network – listing on the Irish Stock Exchange-this week.”
“We can’t take credit for the success of these companies. We can’t even take credit for their funding success – that is totally down to them and their desirability to the market. But it’s great to have them in our shop window. The more we have, the more compelling the story for everyone in the store.”
Ms Somers was speaking at the Published Accounts Awards ceremony in Dublin today.