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Silverjet Flies Into Financial Trouble

by Robert Lee, Tax-News.com, London

04 June 2008


Silverjet, the UK-based business class-only airline, announced on 30th May that it had suspended operations after failing to secure funding from external backers - making it the third such airline to encounter financial troubles recently.

Silverjet, which catered for business class customers from its base at London Luton airport on routes to New York and Dubai, had been depending on drawing down some USD5mn in proceeds under a loan facility agreed with Viceroy Holdings, a fund based in Abu Dhabi, but by the end of last month, had yet to receive this money.

The announcement came one week after the airline revealed that its capital reserves were "limited" and that "advances under the loan facility were required as a matter of urgency".

Silverjet's administrators are in discussions with a number of parties interested in a takeover deal, but if new backers for the venture are not found, it will follow Eos and MAXJet -two other business class airlines, into bankruptcy.

According to the UK's Sunday Times, airline industry insiders have suggested that Viceroy Holdings could bid for the stricken airline. It is also thought that an alternative bid could come from a group of Silverjet's former managers.

"Silverjet continues to be in discussions with investors interested in supporting the business of Silverjet, however it has yet to conclude such discussions to its satisfaction," the company's statement confirmed.


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