Ryanair's share success remains on a steady high

RYANAIR shares traded briskly in Dublin and New York yesterday, closing unchanged at 315p and maintaining the 120p premium achieved on the launch price of 195p.

In Dublin the shares dipped at the opening to 283p and traded at a wide range of prices from 277p sterling to 305p before closing at 315p.

While Ryanair is in negotiations with its baggage handlers, to avert a possible strike from Sunday night, the flotation prospectus has shown that the company, the Ryan family and Irish Air paid just under £10 million in fee commissions and expenses for its successful flotation.

The flotation cost Ryanair £7.2 million, while the selling shareholders, mainly the Ryan family, paid fees of £2.4 million.

Ryanair sold 33.3 million shares, generating gross revenue of £64.9 million at the 195p offer price. But the net proceeds for the company - after payments to underwriters, lawyers and financial advisers, stamp duties, and other taxes - was £5-7.8 million.

Of the £7.2 million cost to Ryanair, financial institutions, including the underwriters, got £3.9 million.

The payments to the underwriters totalled £6.3 million, £3.9 million from Ryanair and £2.4 million from the Ryan family and Irish Air.

The underwriters included global coordinator Morgan Stanley which also acted as joint sponsor with IBI Corporate Finance and international underwriter with the Investment Bank of Ireland, CS First Boston, Credit Suisse First Boston and The Robinson Humphrey Company.

The Ryan family and Mr David Bonderman's investment vehicle, Irish Air, sold a total of 26.5 million shares raising some £51.68 million.

Their fees were only £2.4 million because the company paid some of the fees associated with the sale of shares by the shareholders.

But the underwriters to the flotation did not profit from exercising their "green shoe" option.

This option allowed the underwriters to buy 5.6 million extra shares at the offer price from the Ryan Family and Irish Air. The underwriters exercised the option, spending just under £11 million.

But an IBI spokesman said that the shares were used to cover "overallotments" - where more shares than were available were already allotted by the underwriters to institutions at the offer price.

Ryanair employees took up shares to the value of £2.2 million at the offer prices, just 55 per cent of the £4 million allotted for employees.

The company said that 86 per cent of its 650 employees took up the offer, an average subscription per employees of just under £4,000.

The company is currently in direct negotiations with its baggage handling staff about improvements in their pay and conditions following a threat of industrial action.

The staff are represented by a 15 member negotiating committee, according to operations director Mr Conor McCarthy.

According to the company, "a union claiming to represent members of the company's ground handling staff" wrote to the company in May stating that a majority of these members had voted in favour of taking industrial action from June 2nd.

Ryanair said it had 130 ground- handling staff including 73 baggage handlers. The company does not know how many of its staff are members of the union, Mr McCarthy said.

Some 59 of its 73 baggage handlers have signed a letter stating that they wanted to suspend any proposed industrial action and to resolve the issues directly with the company, he said.

The company is confident the issues can be resolved, he said. The company became aware of the problem when it lost six baggage handlers to Servis Air, which had recently increased its pay levels, he said.

Mr Michael O'Reilly, of the ATGWU, said two thirds of the baggage handlers voted to take industrial action from Sunday night.

The union had no reply to requests for a meeting to discuss the grievances, he said.

Mr O'Reilly alleged that some baggage handlers were being intimidated.

Mr McCarthy denied this allegation, describing it as "very unfair". Mr O'Reilly was meeting the baggage handlers late last night.