Minister for Transport, Tourism & Sport Leo Varadkar and Minister for Jobs, Enterprise & Innovation Richard Bruton welcomed Government approval to publish the Bill and said it’s an important development for the mid west region.
The State Airports (Shannon Group) Bill 2014 will give effect to the Government’s decision to set up a new commercial State company in Shannon comprising Shannon Airport Authority and a restructured Shannon Development. The Bill will now be sent to the printers and will be published in a few days’ time. The process to establish Shannon Group will start when the Bill has been enacted.
The Bill will:
· Establish Shannon Group plc on a statutory basis;
· implement a special insolvency regime for aircraft assets under the Cape Town Convention – which will benefit Ireland’s important aviation leasing sector;
· make changes to existing statutory provisions governing superannuation schemes in the State airport authorities including amendments to facilitate changes to the Irish Airlines (General Employees) Superannuation Scheme.
“The publication of this Bill marks a further milestone in the restructuring of the State’s assets in Shannon. Aviation is hugely important to the mid west, and Shannon Group will aim to further develop aviation-related activities and services in and around the airport as set out in the Shannon Aviation Business Development Task Force report,” Minister Varadkar said.
Minister Bruton said: “Shannon Development has already been fundamentally restructured in preparation for the establishment of Shannon Group. Its non-commercial functions in relation to industrial and tourism promotion and regional development have already been transferred to the relevant national agencies and it will transition to a fully commercial subsidiary of Shannon Group concentrating on realising value from its extensive property portfolio.”
The Bill will make the new Shannon Group PLC the parent company of both Shannon Airport Authority (SAA) and Shannon Development. The State will no longer have direct ownership of those two companies. As wholly-owned subsidiaries of Shannon Group, SAA and Shannon Development will maintain their separate legal identities.
The two Ministers said they hope the Shannon Group Bill can be enacted before the summer recess while recognising that that is entirely a matter for the Oireachtas. The priority will then be to formally establish the new Shannon Group company, appoint its board, transfer ownership of SAA and Shannon Development, and carry out all legal and administrative procedures to ensure that the new company structure is ‘bedded-down’ as soon as possible.
The Bill approved today by Government also contains an important amendment to the International Interests in Mobile Equipment (Cape Town Convention) Act 2005 which will enable the Government to give effect to the special insolvency regime, known as ‘Alternative A’, in the Aircraft Protocol to the Cape Town Convention. Subject to enactment of the Bill, the Government will make an order under the 2005 Act which will, inter alia, specify a ‘waiting period’ of 60 days for insolvency related events under the Convention.
“If Ireland is to maintain its position as one of the top global centres for aircraft leasing, we must ensure that we do not fall behind the growing number of countries that have adopted this special insolvency regime for aircraft assets, including this 60-day waiting period which is similar to that under the US Bankruptcy Code. Essentially, what this will mean is that unless a default is otherwise remedied, a creditor will automatically acquire the right to repossess the aircraft asset after a period of 60 days. This will assist Irish airlines and the aviation leasing community in gaining access to more cost effective and wider sources of capital internationally and will also facilitate the issuance of aviation debt in Ireland” Minister Varadkar said.
The Bill approved today also includes amendments to existing statutory provisions governing pension schemes in the State airport authorities including amendments which will facilitate any changes to the Irish Airlines (General Employees) Superannuation Scheme that are necessary to give effect to a resolution of the current difficulties of that scheme.
“As I have said before, I do not have any formal function in relation to the funding difficulties of the IAS scheme – resolving those difficulties is a matter for the trustees, the members of the scheme, the employers in the scheme and Pensions Authority. However, the Shannon Group Bill includes legislative amendments that will facilitate implementation of any negotiated resolution of the IAS scheme difficulties”.
In this regard, the Expert Panel established to explore possible routes to a resolution of the current difficulties said in a statement on Friday last (11th April) that it will continue its engagement with the parties over the coming weeks and that it expects to report back in early May.