SEVEN GROUPS are set to receive an information memorandum relating to the sale of Aer Arann.

The document is being completed by the interim examiner this weekend, and will be sent in the coming days to those who have expressed an interest in investing in the loss-making Irish regional airline.

Informed sources said an investment of €5-10 million is likely to be sought from any new owner. This will comprise additional working capital for the business and funds to repay some creditor debts.

A lot will be depend on the haircut that can be agreed with creditors.

Creditors are believed to be owed about €10 million on a going concern basis.

It is understood that Aer Arann owner Pádraig Ó Céidigh will be one of those parties in receipt of the sale memorandum.

Mr Ó’Céidigh is believed to be seeking to put together a consortium to take control of the business, which has lost €18 million since the start of 2008.

The seven groups comprise airlines and private equity.

It is understood that fellow Irish airlines Aer Lingus, Ryanair and CityJet have not expressed an interest in investing in Aer Arann.

Aer Arann’s biggest creditors include the Revenue Commissioners, who are owed €1.6 million, and the Dublin Airport Authority, which is owed just under €2 million.

Aer Arann last reported a profit in 2007, when the surplus was just under €4 million.

It is understood that the airline’s regional service on behalf of Aer Lingus is profitable. This comprises five aircraft operating routes to Britain from Dublin, Cork and Shannon in Aer Lingus livery.

While Aer Lingus is keen to keep these routes flying, it is not prepared to invest in Aer Arann.

However, its five public service obligation (PSO) routes, which are subsidised by the Government, are not thought to be profitable when taken together. This is in spite of a €13 million subvention from the exchequer. The contracts for the PSO routes are due to expire in July 2011.

It is understood that the interim examiner – Grant Thornton’s Michael McAteer – is keen to conclude the examinership speedily.

With the peak summer season now passed, cash flow at Aer Arann is tight and the airline is operating off a €1 million overdraft facility provided by AIB.

Meanwhile, it has emerged that Aer Arann’s ultimate parent group is a limited company registered in the Isle of Man.

This means that Mr Ó Céidigh, who wholly owns the airline, will not be personally liable for the airlines debts should the company collapse even though Aer Arann’s Irish company has unlimited liability.

A full hearing on the examinership will be held at the High Court on Wednesday. It is due to be heard by Justice Mary Finlay Geoghegan.

The examinership is not expected to be opposed by any creditors.

Headquartered in Santry, Dublin, Aer Arann operates a fleet of 13 aircraft and employs approximately 320 staff.