November 24, 2011 / 7:52 AM / 8 years ago

UPDATE 2-Ryanair issues fresh threat over Aer Lingus EGM

* Wants meeting over Aer Lingus pension deficit

* Aer Lingus again rejects calls for EGM

* Ryanair claims decision not up to Aer Lingus

DUBLIN, Nov 24 (Reuters) - Irish airline Ryanair said it will pursue Aer Lingus directors for a breach of company law if the former state carrier refuses again to hold an extraordinary general meeting.

Ryanair, Aer Lingus’s largest shareholder with a near 30 percent stake, said on Thursday it had the right to request a meeting at which it wanted to discuss Aer Lingus’s 400 million euros ($534 million) pension deficit and a tax settlement.

Aer Lingus, which said last week that the requisition to hold a meeting was not properly made and that Ryanair was using its shareholding simply to harass a competitor, once again rejected the call.

Ryanair, a thorn in its fellow carrier’s side for years with constant criticism of its management and performance, said the decision was not up to Aer Lingus.

“Please be advised that should your board again refuse to convene this properly requisitioned EGM, then Ryanair will pursue the directors of Aer Lingus for this breach of Irish company law and the listing rules of the Irish Stock Exchange,” Ryanair said in a Nov. 18 letter addressed to Aer Lingus and released on Thursday.

Aer Lingus replied to the fresh threat by saying the allegation that there had been a breach of company law and listing rules was completely without foundation and that the requisitions to convene an EGM remained invalid.

“Despite our numerous, clear responses on this matter, Ryanair, Aer Lingus’ most significant competitor, continues to use its shareholding to attempt to mislead our shareholders and harass and distract our Board and Management from the running of the business,” the airline said in a response emailed to Reuters.

While Ireland is considering selling its 25 percent stake in Aer Lingus as part of a wider sale of state assets under an EU-IMF bailout, the airline’s pension deficit, larger than its 380 million euros market value, is a major stumbling block.

Ryanair, which has said it would consider selling its Aer Lingus stake to whoever buys the government’s holding, wants the airline’s board to confirm it has no obligation to make any additional payment to its pension scheme.

Aer Lingus said in August it had no obligation to fund the pension deficit, adding its position could be open to legal challenge.

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