British All-Business Airline Lays Off Workforce As Buyer
Negotiations Broken Off
Hopes to revive SilverJet, an
all-business class airline based in England, were dashed Friday as
talks with a crucial source of funding fell apart.
As reported by ANN, the
airline received an offer on June 10 from Kingplace, an
Ireland-based investment company managed by Geneva-based management
company Heritage Cie SA, to buy and relaunch the airline.
Talks broke down with the investor Friday as problems arose over
raising enough cash to satisfy the regulator, the Civil Aviation
Authority (CAA).
The Irish Times reports the CAA required Kingplace to prove it
could provide more than £25 million of funding for the
airline over the next six months.
Also thought to contribute to the collapse of the deal were
negotiations over leases on the SilverJet aircraft.
Kingplace had hoped to have the airline flying again within
weeks, retaining its entire staff.
SilverJets joint administrator Mark Fry said, "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."
"As a consequence, we have today (Friday) had to make the entire
workforce formally redundant, in line with our legal obligations as
administrator."
As a result of the breakdown, all 420 workers at SilverJet were
immediately laid off.
Rules that stipulate jobs must go unless a buyer can be found
within two weeks of a company entering administration forced the
administrators to make the announcement of the immediate job
losses.
Fry added negotiations would continue in an effort to sell off
SilverJet assets to repay company creditors.
Fry noted Kingplace still had interest in the airline, though it
chose not to fund SilverJet's wage bill. Additionally it was
revealed other parties were still interested in buying the airline,
though unlikely a successful sale would now be happen.
"There's a very short window of opportunity but as every day
goes by it gets more difficult," he said.
Most likely the airline will go into liquidation with assets
such as contracts on aircraft and departure lounges attracting some
interest. The SilverJet brand may also be sold. All funds will
repay the airline wage bill.
As a result, funds from the possible sales will make no
difference to creditors or shareholders.
On May 30, SilverJet ceased operations and was put into
administration after suspending shares the week prior.
SilverJet was thought to be losing about £1 million a
month last year and this was thought to have doubled before it
entered administration.