The Union of Students in Ireland is set to walk away with £9 million from the sale of its stake in the student travel company, USIT.
USI, which has 250,000 members, plans to buy a new state-of-art headquarters in Dublin for about £2 million and invest the remainder of the windfall in a portfolio of shares and other investments and to improve its overall service.
The union's profit taking makes it far wealthier than many medium-sized Irish companies. The organisation is not planning to share the proceeds with its members, but said the money would "secure the future of the student movement in Ireland".
For a union which was facing bankruptcy a few years ago following legal action over abortion information, its fortunes have been transformed by the expansion in student travel and corresponding growth of USIT.
USI is selling its stake in USIT back to the company, which is controlled by a group of business people led by the chairman of the Sunday Tribune, Mr Gordon Colleary. He said yesterday said it was "logical that USI would want to sell their shares and focus directly on their service to students in Ireland".
It is a far cry from USIT's shoestring beginnings in June 1959 when a group of entrepreneurial students at Trinity College and University College Dublin began operating a travel desk to send their colleagues to Britain and France for the summer.
The good news may not end there as USIT is considering a flotation on the stock exchange and students and USIT staff are to be offered shares at a discount. "We are extremely happy with the deal and believe we got the best price possible," the president of USI, Mr Philip Madden, said. This was secured after taking advice from accountancy firms, McStay & Co and Peelo and Partners.
The exact details of the deal will be given to USI's members when they return to college after the summer. USI has a 50 per cent shareholding in USIT Now (Ireland) and a 12 per cent stake in USIT World which owns USIT Now (Ireland). Mr Madden said the £9 million was raised by selling both stakes.
USI declined to reveal what the stakes were worth individually.
USI said it could not distribute the windfall among its 250,000 members because its articles of association obliged the union to invest any profits it makes back into the union.
The incoming president of USI, Mr Julian de Spainn, said the money would allow USI to improve its campaigning and to cover costs such as travel which many members had to provide themselves. Mr Madden said it was a "defining moment" for the union and students generally.
The union will continue to work closely with USIT, and they will both sponsor a new international student identity card. USI will also retain four of the eight seats on the board of USIT Now (Ireland).
USIT World grew out of the success of USIT in Ireland. Mr Colleary and his fellow directors have established themselves in more than 20 countries around the world.