Five bidders are now interested in buying TEAM Aer Lingus, but the front runner is still BF Goodrich, a giant American conglomerate. Aer Lingus wants a deal concluded before Christmas and the purchase price could be around £25 million.
It has also emerged that the maintenance division of SRS, a small company which Aer Lingus owns in Shannon, is to be sold to United Parcel Services (UPS). Heads of agreement have been signed for what is effectively half the business. UPS is this division's main customer.
No figures were released for the purchase price. The maintenance business employs 120 staff. The remainder of the business is a baggage handling and check-in facility at Shannon Airport which handles other airlines flying through Shannon.
UPS has been mentioned as a possible bidder for TEAM, but has since been discounted. Goodrich is an aerospace and chemicals company. However, the list of three interested parties at the outset has been increased to five.
Effectively, a deal for £25 million would leave Aer Lingus around £130 million out of pocket. This is the amount of money the company has put in to the maintenance division over the past number of years.
It would mean that the buyer would be getting a company that is now effectively debt free.
Chief executive, Mr Gary McGann addressed angry workers yesterday afternoon, putting his case in advance of meetings with union officials next Wednesday.
Core issues to resolve include letters of comfort which 1,200 of the 1,600 aircraft maintenance division have. Effectively it means they can return to Aer Lingus if TEAM closes.
Buying out the letters could cost around £20,000 each. This would mean that an added cost of £24 million for Aer Lingus. However, it is unclear how much it will cost as union sources said each letter would have to be negotiated individually.
Mr McGann told the packed meeting that the aircraft maintenance industry was consolidating and TEAM offered a serious strategic opportunity for a number of big industry players.
He said TEAM could become a critical part of a major global player which would be successful in both the short and the long term.
However, he warned that if TEAM did not find an alliance partner, it would struggle to make progress and pay pressure and cost cutting would continue to be a major issue.
He said that, in an economic downturn, TEAM would be squeezed out by the big players which would want to take out excess capacity.
Speaking afterwards, Mr McGann said he was satisfied that the potential investors were very serious bidders. It is understood that some want to take majority stakes, but at least one wants to buy it outright.
He said the investors were not prepared to hang around and wanted the issues sorted out before investing. He admitted that they were "driving the timetable to a very significant extent".
He declined to reveal who Aer Lingus was talking to, nor would he specify a price. "I can guarantee you that we will get a genuine market price which will stand up to any commercial scrutiny."
He acknowledged that the workers had very real concerns and said that the employees felt very unhappy and very let down.
Mr Brendan Walshe, a spokesman for SIPTU which represents around 400 workers, said there still a huge credibility gap between management and workers. He said it had to be bridged before anything else could happen. He added that the letters of comfort was just one issue.
It is understood that employees are very concerned that Aer Lingus will sell TEAM to another company with current working conditions still applying. Employees have argued that they are due a 7.5 per cent pay rise to bring them into line with Aer Lingus workers.
