Silverjet sale agreed; could fly again ‘in weeks’
10.06.08
Kingplace Ltd, the Swiss funded, Irish registered shelf company, has agreed to acquire Luton Airport based failed all business class airline Silverjet, which ceased operations last month when its funds ran out, the administrators announced today. Terms of the deal were not disclosed, and it is subject to regulatory approval, but shareholders and unsecured creditors in the failed airline are likely to have lost all of their money.
Kingplace, which is managed by Geneva-based management and trust company Heritage Cie SA, said that it hoped to resume operations in a matter of weeks, subject to regulatory approval from the CAA and authorities in its foreign destination countries.
Ian Ilsley, a director of Kingplace, said: ‘If these negotiations are successful, we expect to take on all of the existing staff and to honour Silverjet's existing customers' tickets. Silverjet will return to the skies in a matter of weeks.'
Silverjet chief executive Lawrence Hunt said: ‘We now have the backing from a long-term investor to relaunch Silverjet. We will be working around the clock to launch our New York and Dubai services as quickly as possible. We will make the announcement about the date for relaunching services in due course.’
Administrators Begbies Traynor said in a statement today that Silverjet was purchased for an undisclosed sum in a deal due to be completed by June 13 (Friday). The deal is subject to regulatory approval, and it is thought Kingplace will have to inject between £20m - £30m to make the relaunch viable.
The offer from Kingplace is being made on behalf of private clients, Begbies Traynor said. Mark Fry, joint administrator of Silverjet, said in the statement: 'We are pleased to have agreed principal terms with Kingplace to relaunch the airline. This agreement is excellent news for the company's suppliers, staff and loyal customers.'
However, it is not such good news for Silverjet’s creditors and shareholders. They will not receive a penny as the total amount offered by Kingplace will not cover all of the Luton-based carrier’s trade debt. Mr Fry said: ‘All of the trade creditors and shareholders are going to lose 100%. Any distribution to the creditors will be marginal from the insolvency.’
It might also not be good news for ticketed passengers. When Silverjet suspended flights, just under 10,000 customers had to make alternative travel arrangements. Many have been told by their credit card companies that they cannot be refunded on their Silverjet tickets until it goes in to liquidation, even though they have been forced to make alternative arrangements. If the airline does take off again, and honours existing bookings, the passengers could have two sets of tickets, which could cause angst and confusion.
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