Times: ‘Cash hurdle for Silverjet bids’
09.06.08
Bidders for failed Luton Airport all business class airline Silverjet face a stiff financial hurdle imposed by the Civil Aviation Authority (CAA) if they want the airline to fly again from the UK, the Times reports today. It quotes 'sources close to the talks' on the sale of the carrier saying that the CAA was likely to demand a big injection of cash to satisfy its capital-adequacy rules.
The aviation regulator usually asks airlines to show they have cash in the bank equivalent to six months’ operating costs before they are allowed to start commercial service. However, the Times says an 'airline executive familiar with the talks' told it: ‘In Silverjet’s case, the CAA can see that it burnt up around £75m in cash since it was set up, and can use that to put a figure on what a new investor would need to put in up front.'
Administrators Begbies Traynor were continuing talks with two bidders over weekend. One is Kingplace, a shelf company registered in Ireland and managed by Heritage Cie, a Geneva trust and management company. It is working with Lawrence Hunt, Silverjet’s chief executive and founder. The other, unnamed bidder is thought to be an airline. A third potential buyer – thought to be the Reuben brothers, the company’s senior creditors – is reported to have made a preliminary approach late last week.
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