UAE investor comes to Silverjet's rescue with $25m cash infusion

Dubai: An undisclosed UAE investor came to the rescue of British business-class airline Silverjet with a $25 million cash injection with an option to infuse a further $75 million, the airline said in a statement.

"Following recent material increases in fuel prices and tightening of credit conditions in the airline industry, Silverjet's working capital has deteriorated and its residual reserves are limited," the company said in a statement.

Silverjet yesterday said it has entered into a memorandum of understanding (MoU) on April 29 with a UAE-based investor for a $25 million investment by means of debt and equity.

"It is anticipated that the equity element will amount to approximately $8 million which will be subscribed at 17 pence per share; as a result the new ordinary shares will represent approximately 28 per cent of the enlarged share capital. It is expected that a debt facility will be made available to the company imminently," it said.

The MoU also sets out the intent by the investor to invest up to a further $75 million in the ongoing development of Silverjet and to participate in the international rollout of the Silverjet brand and concept into new markets within the Middle East, the Far East and Africa.

Agreements

The directors anticipate that Silverjet will enter into binding agreements in respect of this initial tranche of the investment imminently.

Upon completing the investment, it is intended that the investor will appoint two representatives to Silverjet's board of directors.

Lawrence Hunt, chief executive of Silverjet, said, "This investment places Silverjet in a strong position to further develop our brand and proposition. It is particularly encouraging to have secured this agreement in a challenging environment for all airlines. The support of this investor demonstrates the strength of Silverjet's exclusively business class model.

"The board believes that the combination of Silverjet's already strong brand and presence in the market with the support of a long term strategic investor will enable Silverjet to continue its growth and success achieved to date."