|Monarch Boeing 737-400|
Julian Bray Aviation Security expert comments: It seems that Monarch and its highly geared Greybull Capital (the major shareholder) has pulled of a right royal truly regal financial sleight-of-hand. Strong early rumours circulating in aviation circles earlier today (Saturday) suggest that Monarch Airlines has succeeded in its heroic last ditch bid to injecting significant new funding of around £160million (mainly from its major shareholder Greybull Capital), plus a significant technical contribution by the US Boeing Company, in terms of debt reduction, by way of sale and leaseback though a financial intermediary (not Boeing)
Monarch has been majority owned by Greybull Capital since 2014, when the investment firm bought a 90 per cent stake in the airline.
Greybull put extra funds into the airline, enabling the CAA to grant a temporary extension to the airline's licence until 12 October, but the new £160million capital funding, is enabled by the Boeing company allowing Monarch to restructure its ongoing aircraft acquisition programme, by a series of sale and immediate leaseback deals.
Some 45 aircraft are said to be involved, and equally vital to keep the Boeing production line running... the deal will upgrade the CAA ATOL to a full licence, ensuring future safety of customers money in relation to IT (inclusive tour) holiday packages combining hotel and accommodation.
Previously Monarch said it was confident it will have secured the "largest investment in its 48-year history". Chief executive Andrew Swaffield beamed "I'm excited about the additional capital coming into the group which will help us fund our future growth".
It is suggested that firm orders have been placed with Boeing for 30 new aircraft scheduled for delivery from 2018, with the remaining 15 now subject to a future option. The revised Boeing arrangement will release previously earmarked funds for Monarch.
Boeing is not expecting to be directly involved as a shareholder or first tier lender under the revised deal. The bulk of the £160m is said to be in the form of new equity.
Monarch has faced a sharp decline for its package holidays to conflict zones including Egypt and Turkey. Widespread air traffic control industrial action in France has also impacted on airline finances generally. But its good news all round, and a welcome relief for over 2,000 employees and partner firms not to mention the airlines own customers...
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