Monarch Airlines has agreed a rescue deal that will result in Switzerland’s Mantegazza dynasty, who started the business with just two aircraft in Luton in 1968, selling up completely.
Family patriarch Sergio Mantegazza is understood to have become impatient with the airline’s financial troubles after Monarch asked for a third bailout in July despite already injecting £75m into the business in 2011, just two years after putting £45m into the business.
Investment firm Greybull Capital has now agreed to pump £125m of permanent capital and liquidity facilities into Monarch, which has been anchored by a £50m investment.
As a result Greybull, which sees the deal as a "long-term investment", will own 90pc of the airline, with the remaining 10pc held by Monarch’s pension protection fund. The carrier’s pension fund reportedly has a deficit of more than £300m by some calculations.
Andrew Swaffield, Monarch chief executive, said: “I am delighted to welcome the Greybull team as the new owners of the Monarch Group. We have a shared vision for the strategic direction and prospects for the business, and I am looking forward to working with them to implement the exciting plans for building our future.”
Greybull’s investment was contingent on Monarch’s turnaround plan being sucessful. The airline has already axed 700 jobs out of its 3,000 employees and reduce its aircraft fleet to 34 from 42. The airline will now recfocus solely on short-haul European flights and ditch charter flights.
The terms were agreed on Friday night at law firm Freshfield’s offices, just hours ahead of Monarch’s licence with the Civil Aviation Authority expiring.
Monarch required as much as £60m to shore up its finances, but the situation was considered so dire that restructuring specialists KPMG were waiting in the wings in case a search for a new investor failed.
The search for a new financial backer by Dean Street Advisors, the boutique advisory firm founded by investment bankers Mervyn Metcalf and Graeme Atkinson, and aviation advisory firm Seabury Capital drew interest from private equity investors and venture capitalist Jon Moulton’s Better Capital.
Greybull Capital was founded in 2010 by financier brothers Nathaniel and Marc Meyohas, who were pushed into the spotlight as one of the backers of Comet, only for the electricals chain to collapse months later with 7,000 jobs lost. Greybull’s structured financing meant that it recouped most of its money after the collapse.
Sergio Mantegazza is worth $4.7bn (£2.8bn), according to Forbes magazine.
Commenting on behalf of the selling shareholders, Fabio Mantegazza said: “We are very proud to have created one of the most loved aviation brands in the UK over the past 46 years. We think that now is an appropriate time to allow new shareholders to take Monarch into the future, with secure financial backing and clear strategic goals and we wish the Group every success.”
The terms were agreed on Friday night at law firm Freshfield’s offices, just hours ahead of Monarch’s licence with the Civil Aviation Authority expiring.
Monarch required as much as £60m to shore up its finances, but the situation was considered so dire that restructuring specialists KPMG were waiting in the wings in case a search for a new investor failed.
The search for a new financial backer by Dean Street Advisors, the boutique advisory firm founded by investment bankers Mervyn Metcalf and Graeme Atkinson, and aviation advisory firm Seabury Capital drew interest from private equity investors and venture capitalist Jon Moulton’s Better Capital.
Greybull Capital was founded in 2010 by financier brothers Nathaniel and Marc Meyohas, who were pushed into the spotlight as one of the backers of Comet, only for the electricals chain to collapse months later with 7,000 jobs lost. Greybull’s structured financing meant that it recouped most of its money after the collapse.
Sergio Mantegazza is worth $4.7bn (£2.8bn), according to Forbes magazine.
Commenting on behalf of the selling shareholders, Fabio Mantegazza said: “We are very proud to have created one of the most loved aviation brands in the UK over the past 46 years. We think that now is an appropriate time to allow new shareholders to take Monarch into the future, with secure financial backing and clear strategic goals and we wish the Group every success.”