Aer Lingus has confirmed that the airline will be valued at between €2.10 and €2.70 when the company is floated on the stock market at the start of next month.
In its prospectus statement issued to stock exchanges in Dublin and London this evening, the airline said the Government will sell 72.7 million shares, while 208.4 new shares will be issued.
This means the flotation will raise around €470m after costs, and will value the airline at between €1.1 billion and €1.3 billion after flotation. The Government will keep a shareholding of at least 25.1%.
The final price will be set on September 27, with trading beginning in Dublin and London on October 2.
Selling Aer Lingus shares will allow the airline raise €2 billion to expand its fleet of aircraft. This will mean more routes, as popular Mediterranean destinations to which the airline currently flies once every three days, will be served with daily flights in future years. Aer Lingus also hopes to extend its network to Greece, Turkey, Scandinavia and more US cities, including Florida and San Francisco.
€104m will be used to make a once-off contribution the airline's pension fund. Advisors on the flotation have experienced strong interest in shares.
The details published today list the airline's strengths as its strong presence in a growing Irish market, its leading position between Ireland and the US and its positive brand recognition.
The prospectus - as it is legally obliged to - lists the possible risks facing Aer Lingus and the flotation. These include increased aviation fuel prices, seasonal fluctuations, government regulations and labour relations, overall passenger traffic, currency fluctuations, higher landing fees, the availability of additional slots or landing rights, terrorist attacks, natural disasters and outbreaks of contagious diseases.
One risk is especially highlighted and that is the future development of Dublin airport. The document says that as the airline's current principal base is at Dublin airport, any matters adversely affecting Dublin airport, or any increase in competition on routes from Dublin airport may adversely affect Aer Lingus' business, financial condition and results.
The prospectus says that another potential risk is the Government's retention of at least a 25% stake in the airline. It warns that the presence of the Government and an employee share block could be a major disadvantage for all other shareholders. It says the interests of these two may 'may differ from the majority of other shareholders'.
Another risk factor is the lack of an 'open skies' deal between the US and the EU, which could hinder its expansion plans in the US.
With a fleet of 35 aircraft, Aer Lingus currently flies 11 routes to Britain, 57 to continental Europe, nine to the US and one to the United Arab Emirates.