Advisers to Aer Lingus and Government in line for fee bonanza with the national airline’s flotation

ADVISERS to Aer Lingus are in for a windfall after the Government triggered the airline’s stock market listing yesterday.

The Government and the airline have both hired a number of Irish and international financial and legal advisers to handle the €1 billion flotation.

Though the company and the Government would not comment on the cost of the initial public offering it is believed that it could easily cost more than €10 million and possibly as much as €20m.

The Department of Transport and Aer Lingus are each being advised by two investment banks, legal firms here and in Britain and five public relations companies.

The Government is being advised on the sale of its majority stake by AIB Capital Markets and Swiss bank UBS. These will handle the “book running” end of the privatisation — essentially marketing Aer Lingus to investors such as banks, pension and investment funds here, in Britain, Europe and the USA.

The fees to these investment banks, which have been working with the Government for months, will be met by the Exchequer and are already running well into the millions.

Aer Lingus retains two financial advisers — Dublin firm Merrion Capital and financial giant Goldman Sachs. Aer Lingus finance director Greg O’Sullivan would not say what the float would cost the airline.

William Fry Solicitors and British legal firm Freshfields Bruckhaus Deringer are also advising on the flotation. Two public relations companies are providing communication advice to the Government, including in Britain, while three are engaged by the airline.

In addition to the hefty fees of the advisers, the listing on the Dublin and London markets will also cost the company. The fees paid to the exchanges for joining are not known and neither is the annual cost.

The privatisation of Eircom in 1999 cost the Government and the company around €70 million in fees, which was split between Merrill Lynch and AIB Capital Markets and various other advisers.

Russell Chambers, who led the Merrill Lynch team back then, is now in the same position for UBS

Investment Bank.

Over the next two weeks, the advisers will be preparing the final draft of the prospectus, which details Aer Lingus’ shares indicative price range and its financial performance. This document requires the approval of the Financial Regulator before it can be released to potential investors.

More in this section

Puzzles logo

Puzzles hub

Visit our brain gym where you will find simple and cryptic crosswords, sudoku puzzles and much more. Updated at midnight every day.

Lunchtime
News Wrap

A lunchtime summary of content highlights on the Irish Examiner website. Delivered at 1pm each day.

Sign up
Revoiced
Newsletter

Our Covid-free newsletter brings together some of the best bits from irishexaminer.com, as chosen by our editor, direct to your inbox every Monday.

Sign up