Aer Arann to exit examinership after agreement with Revenue
Published 04/11/2010 | 05:00
Aer Arann is set to formally exit examinership next Wednesday as the High Court prepares to green light a scheme of arrangement which, in the past few days, had hinged on an agreement with the Revenue Commissioners.
It also emerged that Tim Kilroe Jnr, the son of former Aer Arann majority owner Tim Kilroe Snr, is to invest €2.2m in the airline once it exits examinership. It's not yet clear what size stake he will have in the carrier, but it will be substantial.
Examiner Michael McAteer of Grant Thornton was forced to go back to the court yesterday after Ms Justice Mary Finlay Geoghegan said last Friday that she had "serious and significant concerns" about a survival scheme put to the court.
The Revenue Commissioners is owed a total of over €1.1m from Aer Arann and agreement has now been reached between the two parties that will be formally approved by the court tomorrow, allowing it to exit examinership next week. The judge said what remained to be done was a "clerical exercise".
Aer Arann executive chairman Padraig O Ceidigh welcomed the move. "As an island nation it's vital we have a competitive aviation industry to help promote economic revival."
He added that it was important that jobs were created in aviation and other sectors to help the country emerge from its current difficulties.
Tim Kilroe added he was "delighted" to be involved again with Aer Arann. He said it was a "very exciting time with huge opportunities for the airline to grow". He added that the involvement of UK transport group Stobart, which has pledged to spend €2.5m promoting Aer Arann flights to its London Southend Airport, as well as the franchise agreement with Aer Lingus, are critical for Aer Arann's future prospects.
Mr Kilroe's father was a majority owner of Aer Arann from 1981 until 1994, when he sold his 66pc stake to Padraig O Ceidigh.
Aer Arann chief executive Paul Schutz said outside court yesterday evening that the effective approval of the scheme was a "good day" for Aer Arann and said it showed the court believed the airline has a viable business model. He said the airline's 321 staff would also be relieved at the outcome.
"The aviation industry is always challenging, but Aer Arann is now very well positioned for the future," he said, adding that the additional investment from Mr Kilroe would add more "financial solidity" to the company.
He said he hoped Aer Arann's franchise agreement with Aer Lingus would certainly be deepened in the future, and maintained that there were significant opportunities for Aer Arann at London Southend Airport.
Aer Arann had entered examinership after racking up substantial losses over the past couple of years. Its creditors were owed almost €30m, with Allied Irish Banks being the largest creditor, owed €5.2m.