Aer Lingus sets IPO price at 2.20 euros

Aer Lingus sets IPO price at 2.20 euros

	Published : Wed, 27 Sep 2006 13:25 By : Paula Demarzio Print this Story

DUBLIN: Ireland's state airline Aer Lingus Group Plc. has fixed its initial public offering price at 2.20 euros a share, which is at the lower end of the range. The price values the company at 1.13 billion euros.

The indicative price range in the offer was 2.10 to 2.70 euros per share for the Dublin and London listing, which is expected on 2 October.

Trading of shares in the company opened 20 cents above the announced float price in conditional dealings Wednesday. The price reached 2.35 euros in early trading.

The IPO will bring in 501.8 million euros and the company intends to use the net income to meet the planned 2-billion-euro fleet expansion costs and to make a one-off 104-million-euro payment to help offset the pension deficit.

This will be the first airline flotation on the London Stock Exchange in the last six years after easyJet listed its shares.

According to analysts, the IPO was 3.8 times oversubscribed, with the U.K. accounting for a major part of the total institutional demand, followed by Ireland. The company will issue 208.4 million new shares as part of the offering, while the Irish government -- which held 85 per cent of the airline -- will retain a 34.8 per cent stake on listing. In case the underwriters exercise their over-allotment option, the government's stake may come down to 28 per cent.

Of the government owning, nearly 2.8 per cent is subject to a call in favour of the Aer Lingus Employee Share Ownership Trust, which will hold around 9.9 per cent of the company at listing. Employees and former employees have subscribed for 2.2 per cent of the entire issued share capital. Nearly 11.6 per cent will be owned by the public and 40.3 per cent by institutional investors.

Aer Lingus chairman John Sharman described the listing as a momentous occasion in the development of the company.

Chief executive Dermot Mannion said the privatisation marked the beginning of a new era for the airline. He added the level of interest in the company has been particularly positive, both in Ireland and overseas, and reflects the market's confidence in the airline and its continued future as a profitable and competitive company.