Silverjet shares suspended; flights continue
23.05.08
Luton Airport based all business airline Silverjet has suspended trading of its shares amid funding difficulties. The airline said it had yet to receive a $5m draw down from a planned loan it was expecting on May 2, and that this casts doubts on further planned loans of £8.4 million and a £4.3 million investment from Dubai-based international luxury development fund Viceroy Holdings. It is not known why Viceroy has not provided the funds.
Silverjet, which operates flights between Luton and both New York and Dubai, said services ‘continue as scheduled’. But the airline reiterated a statement issued on April 30, which said: ‘Silverjet's working capital reserves are limited and advances under the loan facility are required as a matter of urgency.’
The airline said today: ‘In the circumstances, Silverjet has requested, and the London Stock Exchange has confirmed, an immediate suspension in the trading of the ordinary shares of the company on the AIM market. Silverjet continues discussions with other parties, which have confirmed an interest in investing in the company.’
The suspension of the airline’s shares follows the collapse of US all-business transatlantic carriers MAXjet before Christmas and Eos in April. In a case of deja vu, Eos failed shortly after agreeing lifeline funding, which also failed to arrive. Record oil prices and the global economic slowdown are having an impact on all airlines, with thinly capitalised airlines operating older, less efficient planes, and with limited fuel hedging, seen as particularly vulnerable.
Unless the funds are forthcoming soon (we would suggest this weekend), it looks like Silverjet will be the next airline to fold. As a business passenger, we would not be booking flights with the airline right now, and would be looking to cancel any reservations we had. Without an injection of funds quickly, this announcement can only speed its demise.
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