Silverjet secures $25m investment to keep flying

30-04-2008

Silverjet secures $25m investment to keep flying
Business class airline Silverjet has secured a $25 million (£12.7 million) investment to keep the carrier afloat.

Silverjet, which operates business class-only flights between London and New York has been struggling with losses since it launched in 2006.

As fuel costs soar higher and credit conditions tighten, several airlines have recently announced bankruptcy including long-haul budget operator Oasis and US based Eos Airlines.

Silverjet said the investor is "UAE based" but did not reveal any further details. The airline has signed a memorandum of understanding with the investor for an initial $25 million (£12.7 million) by means of debt and equity.

The equity element will amount to approximately $8 million (£4.1million) which will be subscribed at 17p per share and as a result, the new ordinary shares will represent approximately 28 per cent of the enlarged share capital.

The investor also intends to invest up to a further $75 million (£38.1 million) to expand the brand to the Middle East, the Far East and Africa.

Silverjet warned that if the agreement fell through, the company will have to source alternative means of funding "as a matter of urgency".

As part of the deal, the investor will place two representatives on the board of directors, the company added.

Silverjet has yet to make an operating profit. In releasing its latest passenger statistics the company remained upbeat, however.

Chief executive Lawrence Hunt said Silverjet passenger numbers were up in March and the company was making "solid progress" towards becoming profitable.

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