THE 15 per cent stake which Telecom employees are demanding in return for major changes in work practices is estimated to be worth £150 million - £195 million, according to analysts.
The Government has said it is prepared to cede 5 per cent in return for radical changes in work practices and restructuring of the State company. It is understood that this element of the talks is progressing well. However, employees are seeking a further 10 per cent.
Analysts said yesterday it is extremely unlikely that the employees' unions will be able to wrest 15 per cent. Communications Minister, Mr Dukes, has indicated that he is prepared to consider selling more than 5 per cent when the Government is satisfied that the necessary restructuring and cost reductions have been agreed.
A key element is that the 20 per cent shareholder, KPN/Telia, must agree to the proposals. Sources said last night that they are not terribly keen on the idea of ceding more than 5 per cent.
Analysts said that the 5 per cent stake itself was a very valuable one. They said despite its problems, including a debt of more than £600 million and high staffing levels, the company is one of the best telecommunications groups in Europe. The analysts conservatively valued the company at between £1 billion and £1.3 billion. Five per cent has been the norm in State restructurings in the ESB and Aer Lingus.
"Ceding more than 5 per cent would set a benchmark for other state company workers," said one analyst. "Fifteen per cent is a hell of a chunk and would cut down on the Government's flexibility to offer shares to the public.
It is not clear exactly how the employees intend to pay for the stake. The leader of the Communications Workers Union (CWU) union representing the employees has previously offered £89.7 million for the 10 per cent not on the table. This would be paid for by foregoing bonus dividends and by self contributions to the pension scheme over a number of years.
