The planned sale of the GIB to Australian bank Macquarie is expected to be scrapped, according to a story in the Sunday Times.
However, a Whitehall official quoted in the Financial Times denied that the sale was about to be aborted, saying a floatation was possible although not imminent: “It’s jumping numerous steps to suggest a decision has already been made. It’s jumping several hurdles and issues.”
Responding to the new speculation about the future of the GIB, the Department for Business, Energy and Industrial Strategy reiterated its previous statement that the sale is a “commercially sensitive process” and that it would be “inappropriate” to comment whilst the process is ongoing.
Earlier this month the former energy Greg Barker called for the sale to be halted to prevent “asset stripping”, following reports Macquarie had already lined up a series of potential buyers for the bank’s most valuable assets.
Shortly afterwards the chair of the Environmental Audit Committee (EAC), Mary Creagh, warned against a repeat of the “Royal Mail debacle”, and ministers have since been asked to appear before the committee to allay fears over its sale. Peter Aldous, another member of the committee, today urged the government to retain a 25 per cent stake in the GIB.
In October 2016 Macquarie was reported to have become the government’s preferred bidder in a proposed privatisation process for the GIB after submitting a higher offer than its rival, Sustainable Development Capital.
Climate change think tank E3G and campaign group Greenpeace subsequently anounced they had uncovered evidence that the GIB had prepared for the sale of assets by establishing a number of new companies under its umbrella.
“This sudden proliferation of companies is uncharacteristic of the GIB, which has to date had a simple, stable and transparent structure,” said E3G. “The establishment of holding companies, and multiple corporate layers, is often synonymous with practices such as leveraging excessive debt, asset stripping and financial engineering, including tax avoidance measures.”
Responding to parliamentary questions last week, energy minister Nick Hurd confirmed the incorporation of twelve new companies or “Special Purpose Vehicles” by the GIB in November and December. Eleven of them were created “in order to facilitate the potential introduction of private capital in to a number of GIB’s offshore wind assets”, he said.