Bank of Scotland withdraw support for Kent Airport
27.07.05
Planestation, who own Kent Airport and no-frills airline EUjet, asked for its shares to be suspended today, after it lost the support of its bank, the Bank of Scotland. It appears that the budget airline has caused the company's fall from grace.
EUjet has not lived up to expectations, with bookings of 402,000 reported in the period since services began last September up until the end of June. The airline's five jets, which fly to 19 destinations ranging from Malaga to Prague, needed to carry 800,000 passengers a year to breakeven.
Planestation said last month that it could fund the shortfall by selling assets. It had entered negotiations to sell its 75% interest in Kent International Business Park, which adjoins its Kent airport (see this earlier Kent airport news story).
Last December's re-funding was largely underwritten by stockbroker Evolution at 10p a share. The shares were today suspended at 5.35p after they fell more than 8% in early trading.
The group said: 'Until now, the directors had no reason to believe that support from its bank would not be forthcoming. However, discussions with the company's bank over the last 48 hours have not been positive, and the company was informed this morning that the bank is no longer able to support the company with additional facilities.'
Debts are thought to total more than £22m. Bank of Scotland declined to comment.
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