All-business class British airline, Silverjet, secures $25m lifeline from UAE investor
01 May 2008
Only a few days back, Silverjet, the British, all-business class airline, was offering tickets to passengers of another all-business class airline, EOS, at the same fare after news came in that EOS had filed for bankruptcy. Four days later, Silverjet, with what appears to be a palpable sense of relief, has announced that it has signed a memorandum of understanding (MoU) with an investor in the United Arab Emirates that will provide it with new funding.
Interestingly,this is the kind of a lifeline that EOS was seeking for itself and had failed to secure.
Silverjet said its working capital had deteriorated and it needed funding ''as a matter of urgency''.
The MoU outlines an investment of $25 million, of which $17 million is debt. The balance $8 million will represent 28% of the enlarged share capital at a price of 17p.
Silverjet's chief executive Lawrence Hunt said: "We are delighted to have entered into this memorandum of understanding with a long term strategic investor.
"This investment places Silverjet in a strong position to further develop our brand and proposition. It is particularly encouraging to have secured this agreement in a challenging environment for all airlines. The support of this investor demonstrates the strength of Silverjet's exclusively business class model. ''
"The Board believes that the combination of Silverjet's already strong brand and presence in the market with the support of a long term strategic investor will enable Silverjet to continue its growth and success achieved to date.''
The airline said: ''In the unlikely event that these agreements are not completed, Silverjet will have to source alternative means of funding as a matter of urgency.''
The deal is subject to Civil Aviation Authority and shareholder approval and will see the investor place two members on the airline's board.
Silverjet is a public company listed on the London Stock Exchange. It says it aims to become the global market leader in exclusively business class 'luxury' long-haul air travel. It flies a small fleet of Boeing 767's in a one class configuration.
It currently flies London-New York and London-Dubai and intends to add other long-haul destinations over the coming years.
