No decision on State's Aer Lingus stake sell-off until end of year
Published 16/09/2011 | 05:00
A final decision on whether the Government will attempt to sell its 25pc stake in Aer Lingus won't be taken until the end of the year, the Department of Transport said yesterday.
The department -- headed by Minister Leo Varadkar -- has also again cautioned that a sale of its holding will only take place if the equity and financial markets have stabilised and the "right price" can be achieved for the shares.
"Minister Varadkar no longer considers the Government's 25pc stake to be strategic in light of shareholder changes since the initial public offering (in 2006)," said a spokesman for the minister.
"However, any sale would have to realise sufficient value, as recommended by the McCarthy Report. The stake would only be sold to the right buyer, at the right time, at the right price, with the right conditions."
Tanaiste Eamon Gilmore told the Dail yesterday that no decision had yet been made on the Government's stake.
The National Treasury Management Agency (NTMA) has been tasked with valuing the government's stake, and is expected to report back to the minister before the end of the year.
The process is more complicated than taking a straight calculation based on the airline's current shareprice of 67c. At those levels, the holding is worth just €93m. However, some analysts reckon that the fair value of the stock is closer to €1 per share.
Others believe that coupled with value inherent in prized landing slots that Aer Lingus controls at London's Heathrow Airport in particular, that Aer Lingus stock could be worth more. Interested trade buyers would possibly include British Airways and Iberia owner IAG and Air France.
"With regard to Aer Lingus, the asset will be valued and any barriers to sale will be examined," said the spokesman.
"The Government is keen to ensure that some of the proceeds can be re-invested in the economy and not just used for deficit reduction."
Meanwhile, the department still hasn't identified a successor for the role of chairman of the Dublin Airport Authority. Back in July, it was expected that an appointment would be announced within weeks. However, it's understood the process remains ongoing and no firm timeline has been set.