Ryanair 2008 Annual Report Download - page 59

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59
4 Available for sale financial assets
At March 31,
2008 2007
1000 1000
Investment in Aer Lingus.......................................................................................... 311,462 406,075
During the year ended March 31, 2008 the Company acquired a further stake in Aer Lingus plc., an Irish
airline, at a cost of 158.1m (2007: 1344.9m), bringing Ryanair’s total holding in Aer Lingus to 29.3% (2007:
25.2%). The balance sheet value of 1311.5m reflects the market value of this investment as at March 31,
2008 (2007: 1406.1m). In accordance with the Company’s accounting policy, these assets are held at fair
value with a corresponding adjustment to equity following initial acquisition. This investment is classified as
available for sale, rather than as an investment in an associate, because the Group does not have the power to
exercise any influence over the entity. During the year the Group recognised an impairment charge of
191.6m on this shareholding reflecting a decline in the Aer Lingus share price from the date of purchase to
March 31, 2008.
The Group's determination that it does not have any influence over Aer Lingus has been based on the
following factors, in particular:
(i) Ryanair does not have any representation on the Aer Lingus board of directors nor does it have a
right to appoint a director,
(ii) Ryanair does not participate in Aer Lingus policy making decisions nor does it have a right to
participate in their policy making decisions,
(iii) There are no material transactions between Ryanair and Aer Lingus, there is no interchange of
personnel between the two companies and there is no sharing of technical information between the
companies,
(iv) Aer Lingus and its principal shareholders (Government - 25.4% and the Employee Share Ownership
Plan (‘ESOP’) – 14.3%) have openly opposed Ryanair’s investment or participation in the company,
(v) On August 13, 2007 and September 4, 2007, Aer Lingus refused Ryanair’s attempt to assert its
statutory right to requisition a general meeting (a legal right of any 10% shareholder under Irish law). The
Aer Lingus Board of Directors refused to accede to these requests (by letters dated August 31, 2007 and
September 17, 2007),
(vi) The European Commission has formally found that Ryanair’s shareholding in Aer Lingus does not
grant Ryanair “de jure or de facto control of Aer Lingus” and that “Ryanair’s rights as a minority
shareholder…are associated exclusively to rights related to the protection of minority shareholders”
(Commission Decision Case No. COMP/M.4439 dated 11th October, 2007).