Talks began at Bord Gáis yesterday that could lead to staff acquiring a stake in the company worth up to €100 million.

Discussions on providing the 704 staff with a share in the State-owned company are likely to take several months, but the group of unions said it was pushing for a stake of up to 5 per cent. Management and unions are seeking an agreed framework that will lead to an Employee Share Ownership Plan (ESOP).

The unions have hired accountant Mr Greg Sparks during this process, while management is using the services of KPMG. Once a framework is agreed, the recommendations will be passed to the Government for approval.

At present employees have no shareholding, but unions want the company to come into line with other State-owned companies like the ESB, where staff have a 4.9 per cent stake.

Bord Gáis, under managing director Mr Gerry Walsh, had turnover in 2003 of €703 million and operating profits of almost €150 million.

Based on a valuation of €2 billion, a 5 per cent stake would be worth €100 million. Based on staff numbers of 704, the value of an individual worker's shares would be approximately €142,000. However, unions involved in the talks said they were at an early stage and management was likely to want cost savings in exchange for supporting the ESOP.

SIPTU is the largest union at the company, representing about 400 staff; the TEEU has about 80 staff and Amicus has the remainder. Mr Eamon Devoy, secretary of the group of unions at the company, said the issue of an ESOP was "outstanding business" and unions wanted to see the Government and management deliver on previous commitments.

He said unions realised that "demonstrable change" would have to be conceded in order for equity to be transferred, but he said unions were happy to engage in the process.

Bord Gáis is quite different to other State-owned companies. While it has a large and valuable asset base, its employee numbers are relatively small. This means any ESOP could be highly valuable to individual staff. The ESB, in contrast, employs 9,587 staff, which means the value of its ESOP is significantly diluted.

While the Government has ruled out privatisation of Bord Gáis, the unions are concerned that regulatory and legal change could open the door for a sell-off of certain assets or subsidiaries.

For example, EU law will shortly require the different parts of Bord Gáis to be legally separate. Each division may also have to publish accounts of its own.

Bord Gáis currently consists of three main elements: transmission, distribution and supply.