IAG has said Spain’s Banco Santander has agreed to join with other banks to provide the aviation giant with a €1.4 billion loan to help it fund its proposed takeover of Aer Lingus.
The announcement comes amid reports that IAG and Aer Lingus have met with European Commission officials to discuss competition concerns.
The owner of British Airways and Iberia said in a statement issued on Tuesday that Banco Santander had joined with Deutsche Bank Luxembourg, Bank of America and BA in providing a bridge facility which will be repayable on May 26th 2016.
IAG last week formally announced its offer for Aer Lingus, valuing the airline at €1.4 billion. It intends to buy the airline through a new subsidiary company.
The terms, originally announced last month, would see Aer Lingus shareholders receive €2.55 in cash for each share held, comprising a cash payment of €2.50 and a cash dividend payment of 5 cents.
IAG said its offer would remain on the table for acceptance until 5pm on July 16th.
The company’s offer document pledges to preserve Aer Lingus as a separate operating business within the group while maintaining its brand and head office in Ireland.
It also promises to boost connectivity and keep the Heathrow landing slots for seven years, noting it has agreed the basis for legally binding commitments with the Irish Government on these issues.
Etihad Airways said early last week it had agreed to sell its 4.99 per cent stake in Aer Lingus to IAG for €66 million. Ryanair has not confirmed whether it intends to offload its 29.8 per cent stake in the airline yet It said recently it plans to appeal a ruling by British competition authorities that it must reduce its stake in Aer Lingus to no more than 5 per cent.
Separately, it was reported that IAG and Aer Lingus attended a so-called ‘state of play’ meeting with the European Commission earlier this week to discuss the proposed takeover.
According to a report published through the news service Policy and Regulatory Report (PaRR), which reports on competition law around the world, the two carriers were informed of concerns the commission has about the deal’s possible impact on competition.
The report said the two airlines have until the middle of next week to provide remedies to ease the commission’s concerns.
Source: IrishTimes