Aer Lingus employees gain €25m cash windfall

CURRENT and former employees of Aer Lingus have landed a €25 million pre-Christmas cash windfall as the former national airline buys out the Employee Share Ownership Trust (ESOT).

Aer Lingus announced yesterday that it had made the once-off cash payment of €25.3m to 4,700 existing and past employees of the group.

This transaction has wiped out the ESOT’s borrowings and, with it, the group’s obligation to pay any further share of profits to the trust.

The profit share obligation was established when the company went public in 2006. It obliged Aer Lingus to pay an annual share of profits to the ESOT until April 2023, as well as the full repayment of the ESOT’s debt and associated interest.

In a statement yesterday, the airline said the move provided Aer Lingus with a financial benefit as the once-off cash payment is less than the future profit share payments and other associated costs which were part of the initial share ownership deal.

Aer Lingus chief executive, Christoph Mueller, said: “This development represents a significant benefit for Aer Lingus and its employees.

“The transaction makes financial sense for the group and significantly increases direct employee share ownership.”

Chairman of the ESOT board, Shay Cody, said: “The ESOT is pleased that it has delivered value for its beneficiaries.

“The ESOT looks back with satisfaction on its time as a significant shareholder in Aer Lingus, during which period it played an important role in the development of the group.”

The total of 66.6 million shares to be transferred represent approximately 12.5% of the group’s issued share capital.

Following the payment to the ESOT, about 62.5 million shares will immediately transfer to the direct ownership of Irish residents with about 4.1 million shares to be transferred as soon as practicable to non-Irish residents.