Dáil debates

Wednesday, 7 June 2006

2:30 pm

Photo of Olivia MitchellOlivia Mitchell (Dublin South, Fine Gael)
Link to this: Individually | In context

Question 54: To ask the Minister for Transport if it is the Government's long-term intention to retain a minimum share of at least 25.1% in the State airline Aer Lingus; if so, the means by which it is intended to do so; and if he will make a statement on the matter. [21900/06]

Photo of Martin CullenMartin Cullen (Minister, Department of Transport; Waterford, Fianna Fail)
Link to this: Individually | In context

The Government's intention is to retain a significant shareholding in Aer Lingus so that key strategic interests can be protected. In this regard, the State will retain a minimum shareholding of at least 25.1% in the company, although the exact figure still has to be decided. This is significant because a minimum shareholding of 25.1% in a public company ensures the holder of that interest significant influence over matters requiring shareholder approval. It provides a basis on which to establish board representation. Ownership of more than 20% of the issued share capital of a company would, as the House knows, prevent a third party from compulsorily acquiring 100% of the company.

The question of the level of the shareholding to be retained by the State in the longer term will be a matter for future governments. However, this Government has a clear commitment to retaining at least 25.1% of the company's share capital.

Photo of Olivia MitchellOlivia Mitchell (Dublin South, Fine Gael)
Link to this: Individually | In context

I thank the Minister for his reply. He stated that he wishes to retain a significant shareholding, so that this would give the State a significant interest and prevent the future takeover of the company, against the Government's will, by a third party. Is the Government making a long-term commitment to a minimum share ownership in Aer Lingus? If so, how does it propose to proceed in that regard?

I take it that the reason the Minister did not answer the second part of my initial question is that the answer to the first part is no and that it is a matter with which future Governments will be obliged to deal. Does the Government intend to make a long-term commitment to Aer Lingus?

All shareholders — that includes all of us — and stakeholders, particularly those who work in Aer Lingus and who have a very immediate interest, are entitled to know precisely what the Minister is proposing. He referred to a minimum holding of 25.1% initially. If there was a long-term commitment, he would at this stage be able to inform the House how he intends to effect it. When further shares are issued and an automatic dilution of the State's shareholding occurs, does the Minister intend to hold, in the first instance, more than 25.1% or is it his intention to buy more shares in the company in each further flotation? A long-term decision must have been made in respect of selling the company or is it the Minister's intention to do what was recommended in the Goldman Sachs report, namely, that this should form part of a long-term exit strategy? If that is the case, what is the point in referring to protecting strategic interests?

Photo of Martin CullenMartin Cullen (Minister, Department of Transport; Waterford, Fianna Fail)
Link to this: Individually | In context

My reply to the Deputy was clear. I described a significant shareholding as a minimum of 25.1%. The exact figure has not been decided, so it will be a minimum of 25.1%. It may well be more than that but I am obviously waiting for the final analysis from the advisers with regard to that position. That is of some significance. I have had discussions with the company, trade unions etc., in respect of that point, so I am in a slightly difficult position. I cannot speculate on the floor of the House for obvious reasons. However, I am being absolutely clear in saying that it will be at least 25.1%. It may well be more than that.

On the second part of the Deputy's question, I am being unequivocal in so far as this Government is concerned. I cannot speak for future Governments, but the current Administration has decided to retain 25.1% of the company as an absolute minimum.

Photo of Olivia MitchellOlivia Mitchell (Dublin South, Fine Gael)
Link to this: Individually | In context

The Minister is simply not answering the question. My question does not relate to how much he intends to retain. The minimum figure has been placed in the public domain. My question relates to how long the State intends to retain a strategic interest in Aer Lingus. What is the Government's long-term strategy in respect of the ownership of the airline? Is it the Government's intention to put forward a strategy that will allow it to retain a minimum of 25.1%? Or is it intended that this will merely form part of an exit strategy?

Photo of Martin CullenMartin Cullen (Minister, Department of Transport; Waterford, Fianna Fail)
Link to this: Individually | In context

It certainly is not part of an exit strategy. Obviously, the Deputy is anticipating that we may be in power after the next election. In that event, the position will not change and we will retain 25.1% of the company. That shareholding could be more, in the initial stages, and this would provide us with some headroom.

Photo of Olivia MitchellOlivia Mitchell (Dublin South, Fine Gael)
Link to this: Individually | In context

In the event of a further flotation of the company within the lifetime of the Government, is it the Minister's intention to buy sufficient shares to maintain a 25.1% stake in the company?

Photo of Martin CullenMartin Cullen (Minister, Department of Transport; Waterford, Fianna Fail)
Link to this: Individually | In context

The Deputy can be absolutely certain there will not be another flotation of the company during the lifetime of the Government. I know where she is going with her questioning. I can only speak on behalf of this Government. The position is that we will retain a minimum shareholding of 25.1% in the company. That is absolute.

Photo of Olivia MitchellOlivia Mitchell (Dublin South, Fine Gael)
Link to this: Individually | In context

Am I correct is saying there is no clear long-term strategy on this matter?

Photo of Martin CullenMartin Cullen (Minister, Department of Transport; Waterford, Fianna Fail)
Link to this: Individually | In context

There is. The Deputy is trying to put words in my mouth.

Photo of Olivia MitchellOlivia Mitchell (Dublin South, Fine Gael)
Link to this: Individually | In context

I wish somebody would.

Photo of Martin CullenMartin Cullen (Minister, Department of Transport; Waterford, Fianna Fail)
Link to this: Individually | In context

The intention is clear. The Deputy knows how proscribed I am at this stage.

Photo of Olivia MitchellOlivia Mitchell (Dublin South, Fine Gael)
Link to this: Individually | In context

The Minister is not in the slightest. He should not talk to me about commercial sensitivity.

Photo of Martin CullenMartin Cullen (Minister, Department of Transport; Waterford, Fianna Fail)
Link to this: Individually | In context

I wonder why the legal people keep telling me about this.

Photo of Olivia MitchellOlivia Mitchell (Dublin South, Fine Gael)
Link to this: Individually | In context

This has nothing to do with commercial sensitivity except that this lack of clarity has implications for the sale of the airline.

Photo of Martin CullenMartin Cullen (Minister, Department of Transport; Waterford, Fianna Fail)
Link to this: Individually | In context

There is no lack of clarity. I do not want to be argumentative about this — I cannot nor do I want to put myself in that position. The position is absolutely clear. The Government has decided to retain a minimum stake of 25.1% in Aer Lingus and it may well be higher than that. I am waiting for the final——

Photo of Olivia MitchellOlivia Mitchell (Dublin South, Fine Gael)
Link to this: Individually | In context

My question is how the Minister intends to retain that stake.

Photo of Martin CullenMartin Cullen (Minister, Department of Transport; Waterford, Fianna Fail)
Link to this: Individually | In context

We will retain a 25.1% minimum shareholding in Aer Lingus. The shareholding may well be considerably higher than that. That remains to be seen. There will, however, certainly not be another flotation of the company in the lifetime of this Government.