Tuesday 7 June 2011 Minister for Tourism and Heritage (John Penrose): In my written ministerial statement of 31 January 2011, I said that…
Tuesday 7 June 2011
Minister for Tourism and Heritage (John Penrose):
In my written ministerial statement of 31 January 2011, I said that the Government expected to be in a position to provide the House with a further update in the spring on the process for resolving the future of the Tote.
I am now able to inform the House that, after a thorough, fair and open process, the Government entered into a legally binding agreement to dispose of their interest in the Tote’s successor company to Betfred on 3 June 2011 for a total consideration of £265 million. This is an excellent price, and fulfils commitments made in Budgets 2010 and 2011 to resolve the future of the Tote by June 2011. The Government strongly believe that the terms of the sale, which include important commitments by Betfred both to racing and to staff, provide an excellent outcome for the key stakeholders, and also for the taxpayer.
As I said in my statement of 31 January the Government will also honour the commitment of the previous Government to share 50% of the net cash proceeds of the sale with racing. This amounts to over £90 million and will be made available over a number of years, reflecting the broader fiscal position and the need to spend the funds in a manner consistent with EU state aid rules. The Government will pay interest on the outstanding balance, as appropriate, in the normal way.
The Government now look forward to working closely with racing to discuss the detail and to design appropriate arrangements.
The Government expect to complete the sale after the conclusion of a four to eight-week TUPE consultation and wider information sharing process with employees of the Tote. The final consideration will be subject to a technical, market standard adjustment (upwards or downwards) after completion to reflect the actual level of net debt and working capital on the Tote’s balance sheet on the day the transaction completed.