BT share price: Group loses battle over pension aid repayment

on Oct 22, 2014
Updated: Oct 21, 2019
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iNVEZZ.com, Wednesday, October 22: BT Group Plc (LON:BT.A) has lost a bid to overturn a 2009 decision by the European Commission (EC) forcing the repayment of £16.6 million in exemptions from pension rules.

BT’s share price has added just under 0.6 percent in today’s trading in London.
**BT loses EU court battle**
The European Court of Justice (ECJ) in Luxemburg today backed an EC decision that an exemption granted to the former British telecoms monopoly from paying into a pension protection fund constituted state aid and was therefore illegal.
In 2009, the EC decided that an exemption for the BT Pension Scheme from contributing to the United Kingdom’s Pension Protection Fund (PPF) was state aid provided contrary to European Union law. BT had received a Crown guarantee during its privatisation in 1984 to protect staff pensions if the company went bankrupt, and was subsequently also granted an exemption from an obligation to pay a contribution into a pension protection scheme introduced in 2004.

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The EC ruled that the UK should recover the aid by ensuring that a full levy, corresponding to what would have been due since 2005 without a Crown guarantee, was paid to the PPF plus interest. At the time, the Commission noted that BT had already earmarked £16.6 million in an escrow account corresponding to the levies payable until 2008.
BT and BT Pension Scheme Trustees Ltd subsequently challenged the EU decision in a lower court but lost and then appealed to the ECJ.

The Luxembourg-based court has today dismissed that challenge and ordered BT and BT Pension Scheme Trustees Ltd to pay the costs of the appeal.

“We accept but are disappointed by the court’s decision,” Dan Thomas, a spokesman for BT, told Bloomberg.

An unidentified source close to the company told Reuters that the amount, less than £20 million, would now be paid to the PPF.
**Analysts on BT Group**
As of October 17 2014, the consensus forecast amongst 39 polled investment analysts covering BT for the Financial Times has it that the telecoms group will outperform the market. 
Analyst Ratings Network reports that the FTSE 100 company currently has a consensus ‘buy’ rating and an average price target of 426.81p.
**As of 15:02 BST, buy BT shares at 371.80p.**
**As of 15:02 BST, sell BT shares at 371.60p.**

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