Monarch ‘putting final touches to finance deal’
Monarch is close to finalising a multi-million-pound finance deal with Boeing ahead of the renewal of its Air Travel Organiser’s Licence this week, according to reports.
Sky News reports Monarch is ‘putting the finishing touches to a revised fleet purchasing deal’ with the aircraft manufacturer, although there has been no official confirmation.
The deal involves the restructure of an agreement to purchase 45 new planes, announced in 2014.
Under the restructured agreement, Monarch will be able to enter into sale-and-leaseback arrangements for the aircraft, which sources said would free up ‘significant’ cashflow for the carrier.
Sky said: "The terms with Boeing, which are not expected to be publicly disclosed, will form part of an overall £165m investment package that will see Greybull Capital, Monarch’s controlling shareholder, inject new funds into the company alongside the renewal of its Air Travel Organiser’s Licence (ATOL).
"Firm orders have been placed for 30 of the new aircraft for delivery from 2018, with the remaining 15 subject to a future option to proceed.
"An insider said this weekend that the revised deal with Boeing could generate hundreds of millions of pounds for Monarch given the scale of demand in the market for aircraft financing.
"That, in turn, would allow Greybull to provide more equity to Monarch, enabling it to cope more easily with a downturn in trade similar to that seen in recent months."
Sky News has seen an email sent to staff by Monarch chief executive Andrew Swaffield, who said legal and finance teams have been working hard to ‘dot the i’s and cross the t’s’ and said the announcement would be made on Wednesday, October 12.
Monarch, Boeing and Greybull all declined to comment.
Swaffield is due to fly to Abu Dhabi to take part in a debate at this week’s ABTA Travel Convention, but it is believed he may pull out due to the financing talks. A spokesman told TravelMole the decision to attend was ‘TBC’.
Lisa
Lisa joined Travel Weekly nearly 25 years ago as technology reporter and then sailed around the world for a couple of years as cruise correspondent, before becoming deputy editor. Now freelance, Lisa writes for various print and web publications, edits Corporate Traveller’s client magazine, Gateway, and works on the acclaimed Remembering Wildlife series of photography books, which raise awareness of nature’s most at-risk species and helps to fund their protection.
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