Airport’s future ‘in jeopardy’ as BoI seizes €1.1m
Declan Dooley, Galway Chamber president and a director of the airport, saidto make the move without informing the directors first was unprecedented and should be seen as an alarming development for businesses.
Galway Airport, which has loans from BoI and Bank of Scotland, has had a difficult year, with Aer Arann flights suspended for the winter and Government funding withdrawn. Mr Dooley said the airport had set about reducing its costs and developing a sustainable business plan and the banks had been kept in the loop.
“The Government grant aid came through in December and, as of Jan 1, Galway Airport had €1.8m in cash.”
The airport secured 35 redundancies, and enlisted PricewaterhouseCoopers to approach a number of potential investors/buyers for the business as a going concern.
He said the bank agreed to that at a meeting on Jan 4.
“We had no other communications from the bank. PwC… had identified 60-70 potential investors or purchasers of the facility as a going concern. We shortlisted that down to 12 and instructed PwC to contact them.”
Last Thursday morning, the airport still had €1.6m in its account, but Mr Dooley said that, at 3pm, the chairman received a call to say the bank had offset €1.1m from the airport’s current account against the loans, even though payments were fully up to date.
The directors removed €450,000 and put it into a different bank because, even though it has to be used for the redundancy programme, BoI was legally entitled to seize that too.
That left just €50,000 with which to operate. “That is not a tenable situation,” said Mr Dooley.
“If this is not reversed we can no longer trade as a going concern or sell it as a going concern. We would literally have days because we are running out of cash.”
Bank of Ireland said it could not comment on specific accounts due to client confidentiality but generally where a customer was in difficulty, it “would be in discussion with them on the repayment of outstanding facilities”.
