Aer Rianta has asked the Minister for Finance, Mr McCreevy, for permission to increase significantly its borrowing levels to finance new capital projects, writes Emmet Oliver.
Mr McCreevy received the request recently and he is currently studying it, said a spokeswoman. It is believed that Aer Rianta has Government sanction for € 571 million of debt, but with finance needed for Pier D and major developments planned at Cork airport, it needs to raise fresh finance.
The company's net debt is heading towards €400 million and with Cork alone expected to cost € 120 million and Pier D likely to cost about € 70 million, the company needs to get permission to push its debt limit higher.
The company's room for manoeuvre is limited because it does not have ultimate control over airport charges, which come under the ambit of the airport regulator Mr William Prasifka.
Although he may review his existing determination on charges in August, the company is hoping to move ahead with its plans in the meantime.
While the Department traditionally allows State companies to go beyond their borrowing limits for specific capital projects, the request from Aer Rianta might have knock-on implications for other State companies. However, Aer Rianta has argued strongly that capital projects like Cork and Pier D are badly needed as airport traffic continues to rise.
Aer Rianta has invited tenders for the building of Pier D and the competition closed several weeks ago. However, the Minister for Transport, Mr Brennan, has asked the company not to go ahead with building until the issue of a private terminal at Dublin Airport is resolved.
Mr Brennan is continuing to work on his proposals to set up a new terminal and break Aer Rianta into three separate companies - Dublin, Cork and Shannon.
No proposals are expected to go to Cabinet for at least a forthnight, according to sources. The matters involved are very complex, said the sources, and the Minister wants to make sure his proposals gather wide support, even though unions remain opposed to the idea of a private terminal.
Aer Rianta is expected to announce its annual results shortly, with after tax profits expected to reach about € 35 million for 2002. The Minister has asked the company to pay the Government a dividend of 20 per cent (about € 7 million) of after-tax profits.
Next week Aer Rianta expects to hear if it can appeal the recent High Court judgement in favour of Mr Prasifka over the airport charges issue.
Counsel for the company recently sought leave to appeal and on Wednesday the company should learn whether this has been successful. An appeal to the Supreme Court will not be as expensive as the High Court case, which has cost about €5 million.
