The Taoiseach, Mr Ahern, has rejected suggestions that the break-up of Aer Rianta will cause an unexpected debt default that could cripple the company.
Responding to questions on the Aer Rianta restructuring in the Dáil yesterday, Mr Ahern said the issue of the airline operator's debt "is being dealt with and has been dealt with for the past 12 months".
He had earlier been challenged by the Labour leader, Mr Pat Rabbitte, who said Aer Rianta had been warned by its lawyers of the substantial debt problems that could arise if the company was broken up as planned.
Arthur Cox solicitors told Aer Rianta at the end of June that the restructuring of the company could trigger a default on its debt, which currently stands at about €482 million.
This is because the debt, which comprises a mixture of bank loans and bonds guaranteed by Aer Rianta, was raised by the company at group level.
A break-up of the group into three separate airport authorities would lead to the original borrower being legislated out of existence. This could constitute a default on some of the bank debt, unless the lenders in question had specifically issued a waiver in advance.
Arthur Cox advised Aer Rianta that, unless it had such waivers, the lenders could bring forward the repayment of the debt and any interest that might be due.
A bank default could then automatically trigger a bond default.
It is normal for such waivers to carry a fee for the borrower.Arthur Cox also pointed out that the lenders and bondholders may wish to limit the scope of such waivers by waiting to see how viable Aer Rianta would be after the restructuring.
Mr Rabbitte said the advice from Arthur Cox highlighted the determination of the Minister for Transport, Mr Brennan, to proceed with the restructuring "without any regard for the complexities of the issues involved."
The Taoiseach declined to specify whether or not the relevant lenders had been approached for waivers but he said there was "no ongoing difficulty with the issue".
He said "appropriate communications" had occurred, adding that the "communication process" would continue.
He said the maintenance of good communications between Aer Rianta and its funders was a "very important but normal" part of the restructuring process.
Senior officials from both the Departments of Finance and Transport could participate in such discussions if necessary, the Taoiseach said.
Mr Rabbitte described the Taoiseach's response to the issue as "ridiculous".
The State Airports Bill, which is designed to facilitate the dismantling of Aer Rianta, is at committee stage and should be enacted before the end of the year.
