Courtesy of the Sunday Tribune yesterday (
www.tribune.ie) - I find it very hard to believe that pilots would potentially **** up their pension fund
and their family homes for the cause?
"A NUMBER of Aer Lingus pilots have remortgaged their homes to buy stock in the airline in an effort to fend off the 1.5bn Ryanair bid for the former state carrier.
Almost all of the 400 Aer Lingus pilots are members of the Tailwind Nominees consortium that last week spent almost 20m to acquire a 1.83% stake in the airline. The Irish Airline Pilots' Pension (IAPP) fund has a 2.7% stake, acquired at a cost of roughly 30m. Sources familiar with the Tailwind consortium confirmed that some of the pilots have remortgaged their homes to buy the shares, which have so far cost members an average of 50,000 each. Such a strategy is seen as highly risky by financial experts, as Aer Lingus does not intend to pay a dividend, so pilots are not guaranteed any return from their investment.
Several Sunday Tribune sources said last week that pilots are so concerned about Ryanair taking control of Aer Lingus that they are prepared to go to extraordinary lengths to scuttle Michael O'Leary's battle plan. The Irish Pensions Board recently cautioned the IAPP that it must only make investments that are for the longterm benefit of its members. The warning came after the IAPP used pension funds to buy Aer Lingus shares. The Financial Regulator said it would advise any consumer who borrows to invest that they are at risk of interest rate fluctuations and that it may cost more to borrow the money than could be made on the investment.
Last week, entrepreneur Denis O'Brien said he might buy more Aer Lingus stock to prevent a Ryanair takeover. An additional investment of almost 100m at 3.05 a share would secure 6% of the airline . . . enough to end Ryanair's takeover attempt."