Aer Rianta director pledges court action to stop break-up

An Aer Rianta director pledged yesterday to go to court if necessary to stop the break up of the State airports company into three new entities.

Legal advice obtained by worker-director Mr Peter Dunne warns that implementing the State Airports Bill, 2004, which will allow its break-up into separate airport companies for Cork, Dublin and Shannon, could get banks to trigger the early repayment of €250 million of the company's €484 million debt.

Yesterday, Mr Dunne, a member of SIPTU, said that this could threaten the company's future viability.

"As a director I am obliged to act in the best interests of the company and its assets," he said yesterday.

"I intend to take an injunction against the Minister implementing the legislation if I have to.

"I believe that I and other directors would be obliged to take action, and I would guilty of negligence if I did not do that."

A spokeswoman for the Minister would not comment on Mr Dunne's threat last night.

Aer Rianta's €484 million debts include €250 million in bonds, a form of guaranteed loan that can be traded on the London Stock Exchange, and which are repayable in 2011. Deutsche Bank acts as trustee for the bond holders.

There are fears that restructuring the company could constitute a breach, or "default", of the terms and conditions on which that money was loaned to the company, and thus trigger an early repayment.

Deutsche Bank raised this concern initially last year, after the Minister for Transport, Mr Brennan, announced the break-up plans. Mr Dunne obtained his own legal advice from Dublin commercial law firm, Eugene F. Collins, on Aer Rianta's obligations to the bond holders.

In a letter, the solicitors' firm says: "While we cannot say with certainty what position a bond trustee is likely to take, it is clear that there is at least some risk that the trustee would seek to declare an event of default and early repayment of the bond resulting from the restructuring being effected."

It also warns that if one individual lender got "nervous" during the restructuring process and called in its debt, it could trigger similar action by other lenders.

The Irish Times also learned yesterday that both the Departments of Transport and Finance were aware that the bond trustee, Deutsche Bank, had written to Aer Rianta seeking an assurance that bond's terms and conditions would not be breached.

A spokeswoman for Mr Brennan said he would be dealing with that issue in the Seanad today, where the Bill which will allow the airport operator to be split will be debated.

Bill error could stall Aer Rianta plan: page 17