Work on sale process to commence immediately
Package put forward on key outstanding issues
Following today's Government meeting (4th April 2006), the way has been cleared to activate an Initial Public Offering (IPO) sale of a majority stake in Aer Lingus. Corporate advisors have been mandated to immediately start work on the sale.
The transaction is taking place in order to give Aer Lingus both the commercial flexibility and the financial muscle to compete and succeed in the global marketplace.
The Government will retain a shareholding of at least 25.1%. This affords the Ministers for Finance and Transport the flexibility to balance the airline's commercial needs while protecting the State's strategic interests.
The Government's Corporate Advisors have been instructed to complete the sale transaction as soon as possible, taking account of exchange regulations and market conditions. This will involve considerable work including preparation of a prospectus and securing all of the regulatory approvals that are required to launch the company on the stock exchange.
The Ministers have also mandated the Company to negotiate with the Trade Unions on a package of measures. The package put forward, to be dealt with in parallel to the sale process, is designed to address the three key issues of:
Dilution of the ESOTs shareholding into the future
On Pensions, the Ministers are open to considering a funding solution comprising an upfront investment from the sale proceeds and increased contributions by both the Company and its employees. This three-pronged contribution will address the deficit in the Pension scheme and thereby respond to the concerns expressed by pensioners and staff.
Commenting on today's meeting, Minister for Transport, Martin Cullen TD said: "This is a good day for Aer Lingus staff, customers and the broader Irish economy. We have cleared the way for Aer Lingus to access the funding necessary to offer new routes, expand employment and offer better consumer choice.
"We have mandated Company management to resolve the key issues raised by the trade unions during the consultation process. I am confident that a way forward can be found in which the staff's interests can be addressed and in which the future of the company can also be secured", he concluded.
Dan Pender 01 6041090 / 087 2313415
Veronica Scanlan 01 6041087 / 087 6430622