Bord Gáis workers are set to share in a windfall of €54 million after the energy group agreed to buy back a minority stake in the company held by staff.
About 1,000 members of the employee share ownership plan (Esop) at the State-owned utility are to receive tax-free payouts averaging €54,000 each, with some staff receiving as much as €66,000.
The purchase of the Esop's 3.27 per cent stake comes following a valuation by KPMG that implies an overall equity value of more than €1.6 billion for the Bord Gáis group.
The move to wind up the Esop is part of a wider restructuring of Bord Gáis involving the €1.12 billion sale of its energy business to Centrica and the launch Irish Water, which will operate as a subsidiary of Bord Gáis.
Rubber stamp
Workers were informed of their impending windfall at a meeting in Cork yesterday. Unions are expected to rubber stamp the deal via a ballot of members.
The payments, which will come from the cashflow of the networks business and will be spread out over five years, are restricted to staff employed by the company between 2005 and 2009. The exact amounts will depend on the length of service of the employee involved.
The payments are being spread out to ensure they are tax efficient for Esop members. Under tax rules, Esop members can only be allocated up to €13,000 annually without incurring a tax liability.
The Esop was set up in 2008 after three years of negotiations between the Government, the company and the unions.
Productivity savings
According to both Bord Gáis and the unions, the shareholding was given in return for just over €32 million of productivity savings from workers between 2005 and 2009. These savings were said to include changes in work practices and demarcation agreements.
As part of the process to set up the Esop, KPMG was originally retained in 2008 to value the group, which it said at the time was worth about €1 billion. The 3.27 per cent stake then awarded to staff comprised the productivity savings achieved over the period expressed as a percentage of the group value.
The same methodology was used by KPMG to value the Esop as part of the latest valuation process.
