Three parties due to make final offers on Aer Arann
Airline seeks quick resolution to examinership as creditors prepare for meeting
Published 05/10/2010 | 05:00
Three separate parties are expected to lodge best and final offers tomorrow on making an investment in airline Aer Arann, which formally entered examinership last month.
As many as 14 expressions of interest were originally received by the examiner, Michael McAteer of accountancy firm Grant Thornton, but the list was eventually whittled down to three.
The airline's chairman, Padraig O'Ceidigh, is believed to be among the individuals belonging to one group that remains in the running. Mr O'Ceidigh is thought to have mustered support from business people, including Kerry-based entrepreneur Jerry Kennelly.
It is also understood that one international entity is among the three remaining parties that are expected to submit an investment offer tomorrow. It is expected that Mr McAteer will be back in court early next week to give an update on progress.
Securing a quick resolution to the examinership has been a primary objective of both the airline's management and Mr McAteer due to the nature of the business where cash flow forms such an integral part of operations.
If investment is agreed, a scheme of arrangement must then be put to creditors who would have to approve it, while the court's approval is also required. A creditors' meeting has been slated for October 15.
While Aer Arann had initiated a restructuring process that included addressing its financial commitments as well as layoffs, its plans were scuppered when airlines were grounded across northern Europe in April and May following the volcanic eruption in Iceland.
Mr McAteer previously told the High Court that Aer Arann had met its "forecast targets" during 2010 until it was affected by the closure of airspace.
The court was also told that Aer Arann, which employs 320 and operates 13 aircraft, had made a €4.4m profit in 2007, but that it had lost roughly €6m in each of the three years since.
Among the airline's debtors is Allied Irish Banks, which is owed almost €4m. However, it has been supportive of the carrier and had advanced it additional funds and made an extra €1m facility available to the company. Other creditors include the Dublin Airport Authority as well as Revenue Commissioners.
Aircraft leasing firms are among those that are believed to have originally expressed an interest in Aer Arann, which raised the spectre that they might solely be interested in securing an interest in the airline's aircraft at a discount.
Aer Arann has been counting on its nine-month-old franchise arrangement with Aer Lingus as the foundation for its revival. Under the deal, Aer Arann operates some of its aircraft in Aer Lingus' livery and in return passengers can transparently book seats on the Aer Arann aircraft via the Aer Lingus website.