An aircraft servicing group has landed a multimillion pound rescue deal after the collapse of Monarch Airlines left it facing a calamitous crash in revenues.
Sky News has learnt that Manchester-based Airline Services, which cleans and de-ices planes at a dozen UK airports, this week secured a cash injection from LDC, the private equity firm owned by Lloyds Banking Group.
The demise of Monarch, which plunged into administration on Monday, left Airline Services facing urgent decisions about its future, according to industry sources.
Employing more than 1,000 people across the UK, the company made pre-tax losses? totalling nearly £15m in the two-and-a-half years to April 2016.
Monarch is understood to have accounted for a substantial proportion of Airline Services’ revenues, although other notable contracts include a deal to design, manufacture and fit seats for British Airways.
Other customers include easyJet and Virgin Atlantic, while it operates at airports including Gatwick, Heathrow and Manchester.
Insiders said that LDC, which has backed the business since 2012, had agreed to inject the additional capital ahead of a potential attempt to sell it.
Deloitte and PricewaterhouseCoopers, the professional services firms, have been engaged to assist LDC’s efforts to restructure and offload Airline Services, they added.
Shawbrook, Airline Services’ main lender, is understood to be supportive of the rescue deal.
The ground-handling provider’s crunch talks over its future underline how the collapse of Monarch is already translating into financial? pain for its supply chain.
Nearly 2,000 of Monarch’s staff have already been made redundant by KPMG, the airline’s administrator, as the Civil Aviation Authority approaches the halfway stage of a huge effort to repatriate more than 100,000 customers.
?KPMG is expected to realise tens of millions of pounds for creditors in the coming weeks by auctioning Monarch’s take-off and landing slots, although reports this week suggested that that process could be the subject of legal challenges.
?Two trade unions are also preparing to take legal action over the way Monarch’s staff were made redundant.
There is also understood to be some degree of controversy over the fate of the airline’s legacy pension scheme.
Greybull Capital, which rescued Monarch in 2014, is facing losses totalling hundreds of millions of pounds from the company’s demise, although it will have a substantial claim? on funds recovered for creditors.
LDC could not be reached for comment this weekend.
Source: Sky News