Δείτε εδώ την ειδική έκδοση

Monarch Group sold saving 2,500 jobs

The sale of troubled travel business Monarch Group has been agreed, saving 2,500 jobs.

The Mantegazza family, owners of Monarch for 46 years, signed off on the deal which puts the company in the hands of London-based turnround specialist Greybull Capital for a nominal sum.

Greybull is investing £75 into a radically scaled-down business. It will hold 90 per cent of the business, with the remaining 10 per cent going to the Pension Protection Fund, the lifeboat fund for scheme members.

Greybull and the Mantegazza family are between them committing a further £50m in capital.

The deal enables Monarch's licence to be renewed by the Civil Aviation Authority.

Redundancy notices have been issued to 700 staff and ballots of pilots, cabin crew and engineers voted in favour of salary cuts of up to 30 per cent and changes to terms and conditions.

Andrew Swaffield, chief executive, said while he was delighted the deal had been agreed, "a lot of people have made sacrifices to make this happen".

The Mantegazzas, of Swiss and Italian origin, last month agreed to pay £30m towards reducing a large deficit in the company's defined benefit scheme.

Monarch said the Pensions Regulator had cleared the restructuring and that a retention of a 10 per cent stake by the PPF was "in line with its principles in restructurings such as this".

The company's estimated pensions shortfall is £660m.

Monarch was in the vanguard of charter flying but has suffered from competition from low-cost carriers and self-booking online.

The company made £33.4m in 2011/12, but although it turned in a pre-tax profit of £5.9m last year it has since suffered from intense competition and overcapacity in the market.

Monarch will become a fully-fledged low-cost carrier, its old fleet being renewed and streamlined.

By next April, it will get out of charter flying and flying to long-haul destinations and focus on scheduled, short-haul flights to the Mediterranean and other European leisure destinations.

Fabio Mantegazza said: "We are very proud to have created one of the most loved aviation brands in the UK over the last 46 years. We think that now is an appropriate time to allow new shareholders to take Monarch into the future."

© The Financial Times Limited 2014. All rights reserved.
FT and Financial Times are trademarks of the Financial Times Ltd.
Not to be redistributed, copied or modified in any way.
Euro2day.gr is solely responsible for providing this translation and the Financial Times Limited does not accept any liability for the accuracy or quality of the translation

ΣΧΟΛΙΑ ΧΡΗΣΤΩΝ

blog comments powered by Disqus
v