Advisers to earn €10m from flotation

INVESTMENT bankers and legal advisers are set to earn close to €10 million in fees from the flotation of Aer Lingus, senior Dublin investment sources said yesterday.

Both the Government and the airline have employed top investment advisers for a number of months on various privatisation options.

In a sale of Aer Lingus to another airline or an investment house, the fees would have been relatively small, but listing on the Dublin and London stock markers will net millions for those working on the transaction.

Aer Lingus retains two financial advisers - Dublin firm Merrion Capital and financial giant Goldman Sachs.

The Government is being advised on the sale of its majority stake by AIB Capital Markets and Swiss bank UBS. William Fry Solicitors and British legal firm Freshfields Bruckhaus Deringer are also advising on the sale.

The initial public offering (IPO) of Eircom shares in 1999 cost the Government and the company around €70m in fees, which was split between Merrill Lynch and AIB Capital Markets.

Russell Chambers, who worked on the Eircom float when he was with Merrill, now heads the UBS team.

The stockbrokers will have plenty of work between now and the flotation. They will have to prepare a prospectus for potential investors and take part in roadshows to drum up support among international financial institutions.

In addition to advisers’ fees, Aer Lingus will also have to pay for listing on the Dublin and London stock exchanges.

Unlike the flotation of Eircom, it is not expected Aer Lingus shares will be marketed to small shareholders, though it is not believed the airline will place a minimum cap on how much can be invested.

No timeline has been put on the sale by the Government. Transport Minister Martin Cullen yesterday said the advisers hoped to “complete the sale transaction as soon as possible”.

The airline has said it favours the IPO taking place in June as very little corporate activity happens over the summer.

In the meantime, the board of Aer Lingus is expected to be beefed up with new directors.

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