The proposed purchase of a major equity stake in Ireland West Airport Knock is currently at its due-diligence stage. The proposed purchase of a 17.5 per cent stake in the airport by seven local authorities (Mayo, Sligo, Leitrim, Roscommon, Donegal, and Galway county council and Galway city council ) for €7.3 million has received backing in principal from all the seven local authorities so far. Last week saw Sligo County Council appoint the consultants who will carry out the due diligence investigations into the proposal, which would see the airport shed its current bank debt.
The airport currently has an outstanding debt in the region of €9 million with €7.3 million of that owned to financial institutions and the Western Development Commission owed a further €1.3 million. The proposed equity buy-in by the local authorities would see Mayo County Council take out a €7.3 million loan that it would use to buy in a 17.5 per cent stake in the airport on behalf of the local authorities, and the airport would use the funding to discharge its bank debt.
If the deal goes through as expected, Mayo County Council would have guaranteed arrangements with the six other local authorities to repay them their portion of the loan over a 30 year period. How much each local authority will have to pay will be based on a pro-rata formula that is related to the benefits that each county gets from the airport in terms of bed nights, passenger numbers, and economic spin offs.
At last Monday’s meeting of Mayo County Council which was held at the airport, chief executive of Mayo County Council, Peter Hynes, told the meeting: “We’re currently at due diligence stage, consultants were appointed last week by Sligo County Council who are taking the lead in that particular area with our support, we hope that we’ll have the report by them at the end of December or very early in January, and given that it’s positive it will be brought back to each of the local authorities to ratify.” He added that he hoped the council would have the final proposal before it for ratification by January or February next year.
