Members of the public will be able to buy shares in Aer Lingus when it is part-privatised later this year, according to the Government's proposal document on the sale.
Transport Minister Martin Cullen presented the details of the planned privatisation to the Dáil for approval this afternoon ahead of the summer recess. The Dáil later backed the motion. An initial public offering of the airline is expected in September or October.
Fine Gael's Olivia Mitchell called on the Minister to withdraw the motion, because she believed it would not give the proper approval for the sale of such shares and would be found to be unlawful if challenged.
Labour's Róisin Shortall said the Government was reneging on its promise to put money in to the Aer Lingus pension fund.
Minister Cullen said he had consulted the Attorney General and was satisfied the motion to allow the sale of Aer Lingus shares was correct and lawful.
'The offer structure will be an institutional offer to both domestic and international institutions including institutions in Europe and the US,' the document reads. 'In addition, there will be an offer through financial intermediaries in Ireland which will allow members of the public to buy shares.' A minimum application of €10,000 will be set for retail investors, the Minister added.
The state will retain at least 25.1% of the shares in Aer Lingus and new shares in the airline will also be issued. Minister Cullen said that the exact number of shares to be offered will be decided by the Transport and Finance minister closer to the time of the flotation.
The Minister also spoke about measures to safeguard the airlines London Heathrow landing slots. He said the sale of such slots would be subject to a shareholders resolution, and as a majority shareholder the Government would oppose the sale of slots if it was not in the country's strategic interest.
Aer Lingus - with an estimated value of around $1 billion - is hoping that part privatisation will fund an expansion of its long-haul operations, considered crucial to its future as it faces severe competition on its short-haul routes from Ryanair.
One market source said the minimum investment of €10,000 is probably a 'well-intentioned move' by the Government to limit the offering to more seasoned retail investors. The source said airline shares were notoriously cyclical and that with hindsight, Eircom was perhaps a little 'too democratic' given the number of first time stock market investors who lost money.
Another source suggested that there were probably administrative arguments for the threshold being set at €10,000. Large numbers of small shareholders tend to present a heavier administrative burden.
