Ryanair €90m loss on Aer Lingus stake
29.05.08
Ryanair will take a writedown of €90m for its investment in Irish airline rival Aer Lingus when the low cost carrier reveals its full-year results next Tuesday the Irish Independent reports.
The revaluation is €60m worse than the €30m writedown speculated by Ryanair chief executive Michael O'Leary last December. At the time, Mr O'Leary said the €30m writedown was ‘more likely’ than €90m and would come if Aer Lingus' shares dipped to €2.30 by Ryanair's year-end in March.
He said: ‘I'd certainly be very surprised if the values got up above the level of what we paid for it, so you're probably looking at a writedown of some kind. We'd probably do it at the end of March, when our financial year ends, and then announce it in June.’
Since then, global aviation stocks have been in freefall thanks to rocketing oil prices. Aer Lingus' shares were trading at just €2 by March 31. On that date, Ryanair's 155m shares in the airline were worth close to €310m, down about €90m from their €396m purchase price. These figures imply a writedown of around €90m.
Mr O'Leary also stressed the figure would be ‘an exceptional item’ with ‘no impact on earnings’.
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