Silverjet rescue bid fails; staff redundant
14.06.08
Luton Airport based all business class airline Silverjet, grounded two weeks ago after funds ran out, was left without a buyer and made its 420 staff redundant yesterday after a takeover fell through.
Kingplace Ltd, managed by Swiss investment trust Heritage Cie. representing unnamed private investors, agreed to buy Silverjet on June 10. The deal was subject to regulatory approval, and is reported to have failed because the UK Civil Aviation Authority required the company to have more cash in reserve to guarantee operations than the new investors were prepared to put up, plus a dispute over plane hire. A buyer may have needed to increase fares and raise £100 million for Silverjet to survive over the next year, one analyst said.
Administrators Begbies Traynor said that Kingplace had been unable to conclude the purchase. Joint administrator Mark Fry added: ‘As a result of the unusually complex negotiations with third parties, Kingplace is no longer in a position to acquire Silverjet as a going concern. We have today had to make the entire workforce formally redundant, in line with our legal obligations.’
The 420 Silverjet workers - 370 pilots and cabin crew and 50 administrative staff at its Luton airport base - were warned of likely redundancy two weeks ago when the carrier ceased flying. Talks continue on the sale of Silverjet's assets, both with Kingplace and other potential investors. But it now appears unlikely the airline will ever resume flights.
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