It is expected that the net proceeds of the Offer received by the Comany will be used primarily to finance the expansion and replacement of Aer Lingusí short-haul and long-haul fleet. A one-off pension contribution in 2006 of up to approximately €104 million is also expected to be made by the Company.
The above quote is taken from IPO prospectus dated 12/09/2006 issued by Aer Lingus and its a legal document that persuaded Initial Investors to invest.
Any who still hold Initial shares are free to take an action based on investing where management did not full disclose a future pension liability.
The IPO raised approximately €501 Million Gross.
Now adding in the €140 M to the €104 M already given plus whatever is agreed with Pilots Union basically will mean that Aer Lingus will have contributed 50% of the IPO proceeds to the Pension fund.
Any pension fund contribution will need to be approved by shareholders which is where it could get complicated very quickly.
As Irish Govt hold 25% and tend not to vote then 38% of total shareholders may scupper the deal.
The question Shareholders will ask is what are we getting by giving away €140M owned by us, because it is owned by them and they may feel that given that away is not benefitting them at all.