Investors circle troubled Cityjet
Likely investors are interested in backing troubled airline Cityjet, the High Court heard on Monday, as it extended the carrier's protection from creditors given earlier this month.
Mr Justice Michael Quinn confirmed the appointment of examiners, Kieran Wallace and Andrew O'Leary of specialist firm Interpath Advisory to oversee a rescue of the carrier, which owes creditors €13 million.
The court heard that several investors have expressed interest in the Dublin-based business, which provides aircraft and crew to fly routes under contract for airlines SAS and Lufthansa, since the examiners' interim appointment on May 8th.
Examinership is a court-supervised rescue process for troubled companies. It bars creditors from enforcing debts for up to 100 days to allow court-appointed examiners to devise a rescue plan for the business.
READ MORE
Potential backers could include existing shareholder, Air Investment Valencia, the holding company controlled by businessman Carlos Bertomeu, that ultimately controls 80 per cent of Cityjet.
Confirming the examiners' appointment, Mr Justice Quinn noted that Cityjet had short term liabilities of €13.2 million, but just €7.7 million in cash available.
He pointed that an independent experts' report accompanying the initial appointment of Mr Wallace and Mr O'Leary stated that the company had a reasonable prospect of survival, if it met certain conditions.
They included cutting costs, focusing on the contract with SAS, restructuring some debt and attracting new investment.
'Those conditions are in the process of being achieved and are capable of being achieved during the examinership process,' he said.
The judge noted that Cityjet had gone through examinership twice previously, but argued that this should be 'no bar' to Monday's reappointment, given the changed market conditions and current challenges that it faced.
Cityjet
employs 124 people in the Republic and UK and 461 in Scandinavia through a subsidiary in Denmark.
Along with the trading debt, it has a €32 million liability related to the return of leased aircraft.
The airline does not fly its own scheduled services but provides crewed planes which fly routes on its customers' behalf, a practice known in the industry as 'wet leasing'.
However, Lufthansa is ending its contract with the Irish carrier in October, following a change in strategy decided on by the German airline's board in January.
SAS only emerged from its own Chapter 11 bankruptcy, a rescue scheme overseen by United States courts, after two years in 2024.
The High Court heard that SAS, Europe's largest user of wet-leasing services, was committed to its deal with Cityjet.
Mr Justice Quinn said that this pledge provided a 'reasonable degree of comfort'.
The judge also pointed out that the expert's report showed that 'restructuring would be more advantageous than liquidation'.
Winding up the company could leave creditors with a total shortfall of €177 million, according to the report.
Mr Justice Quinn noted that the joint examiners did not disagree with the independent expert's view that the company had a reasonable prospect of survival.
He added that it was appropriate to take this into account. The judge acknowledged that appointing joint examiners was unusual, but not unprecedented, and was appropriate given the company's scale.
Cityjet provided a cash flow statement showing that it can meet €7.7 million in 'critical' costs needed to keep the company in business over the course of the examinership.
They include payments to aircraft lessors, maintenance, staff and other charges. No creditors objected to the petition to confirm the examiners' appointment on Monday.
The issue is due back in court on Thursday June 5th.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Irish Times
2 hours ago
- Irish Times
Ryanair to boost Shannon winter services
The Government should expand the State's regional airports programme, Ryanair argued after announcing that it will base a new aircraft at Shannon and offer new routes from the mid-western gateway this winter. The carrier said it would base one of its new Boeing 737 'gamechanger' aircraft at Shannon for winter 2025/26, calculating that this should boost passenger numbers there by 100,000. Ryanair will add new routes to Lapland, Madeira and Spanish capital Madrid. The airline intends to increase the number of flights a-week to existing destinations including Alicante in Spain, Lanzarote in the Canaries, Kraków and Wroclaw in Poland, and Edinburgh and Manchester. READ MORE Ryanair estimates that the additional jet amounts a $400 million (€350 million) investment in Shannon. The additional 100,000 passengers will bring the airline's numbers at Shannon to 1.6 million a-year, a statement said. It will also add more than 1,500 jobs, including 350 pilots, cabin crew and engineers. Jason McGuinness, Ryanair's chief commercial officer, said the airline wanted to grow business at Shannon, Knock and Kerry. But he argued that the Government needed to support these gateways by expanding its regional airports programme to cover those that handle up to three million passengers a-year. Mr McGuinness added that this would allow regional airports to 'grow traffic without being penalised for doing so'. Currently the programme is limited to airports with scheduled services that handle up to one million passengers a-year. Mary Considine, chief executive, Shannon Airport Group, said Ryanair's investment was a powerful endorsement of its potential. 'We see a huge potential for growth and believe there is a real opportunity for Shannon Airport to lead the way in re-balancing the national landscape,' she said. Shannon grew passengers by 7 per cent to 2.1 million in 2024, the first time it passed the two-million mark in 15 years.
Irish Times
2 hours ago
- Irish Times
Ryanair's Michael O'Leary sells shares worth €21m
Ryanair Holdings chief executive Michael O'Leary sold almost €21 million worth of shares in the airline group, personally and through his pension scheme this week, stock exchange statements show. The carrier, Europe's largest, recently reported that profits slipped 16 per cent to €1.61 billion in the 12 months to March 31st while it flew a record 200.2 million passengers. Ryanair told the Euronext Dublin stock exchange that Mr O'Leary personally sold 846,726 shares at €23.33, worth €19.75 million in total, on Tuesday. The company also informed the market that Fennor Pension Scheme, managed by Dublin stockbrokers, Davy, sold 53,167 shares at the same price, worth €1.24 million, also on Tuesday. READ MORE [ Michael O'Leary set for one of the biggest payouts in European corporate history after Ryanair hit key target Opens in new window ] The scheme is understood to be Mr O'Leary's. The filing describes it as a 'person closely associated' with the Ryanair Holdings' chief executive. Mr O'Leary personally holds 44 million shares in Ryanair following the sale of his 846,726 units, which amounted to less than 2 per cent of his total stake in the airline. Ryanair has more than one billion shares in issue. Late last month, Mr O'Leary qualified for share options currently worth more than €100 million when Ryanair's shares closed at more than €21 for a 28th consecutive day. Under a deal agreed with the company's board in 2019, he must remain in his job until the end of July 2028, after which he has until the following February to take his option to buy the shares for €11.12 each. Ryanair pays Mr O'Leary €1.2 million a-year plus a bonus of up to half that amount. Speaking after Ryanair published full-year financial results in May, Mr O'Leary told analysts that he and the other company executives gave shareholders good value in an 'era when premiership footballers and managers earn €25 million a-year'. Ryanair blamed weakness in fares for the slip in profits. The airline believes that prices will recover during the current financial year, although delays in the delivery of aircraft will slow passenger growth. It expects growth to normalise from 2026 and argues that it will be the only European airline adding 'meaningful capacity' up to the end of this decade. Mr O'Leary has run Ryanair since 1994, turning it from a loss-making regional airline to Europe's biggest carrier by pioneering low-cost flying, ushering in a new era in air travel in the process. He said last month that he intended to stay in the job until his current contract ends in 2028. Stock exchange rules govern when directors, executives and others connected with publicly-listed companies can trade shares in those businesses. These limit trades to periods when the company does not have access to important financial or other information that it has not yet made public.
Irish Times
3 hours ago
- Irish Times
Warring couple's estimated €500,000 ‘high-conflict' litigation costs is ‘cautionary tale', warns judge
A warring couple's 'high conflict' proceedings involving estimated legal costs of about €500,000 are 'a cautionary tale' about the price of family law litigation, a High Court judge has said. The €1.1 million value of the remaining assets of the marriage of less than five years puts the scale of the legal costs 'in context', Mr Justice John Jordan said. He made the comments when upholding the man's appeal against certain Circuit Court orders made in divorce proceedings. Orders requiring the man to pay the woman a €150,100 lump sum for spousal maintenance, €173,500 to achieve pension equalisation and €61,500 towards her legal fees were described as 'punitive' by Mr Justice Jordan. READ MORE It was a short marriage with few matrimonial assets generated during its existence, the judge said. Taking this into account, and that inheritances accounted for much of the husband's assets, the woman should have about 25 per cent of the available assets, meaning a total lump sum of €275,000, plus payment of her health insurance, the judge ruled. The man has valuable pensions, while the woman's are of nominal value, but that must be viewed in the context of the marriage's short duration, he said. The man has a reasonably good salary and, while the woman earns significantly less, her part-time earnings are reasonable and likely to increase, he said. The Circuit Court failed to properly take into account the man will separately pay €1,100 monthly maintenance, plus some other costs, for their child and had put €56,000 in a trust fund for the child, the judge noted. He set aside a safety order the Circuit Court granted to the woman against the man. He found she had not pressed that court for it and there was a lack of evidence of any violence, or threats of violence by the man. 'Simply to set necessary lines of demarcation,' the judge said he would make orders restraining the man from entering the woman's property. The dispute between the man and woman has been before the District Court, Circuit Court and High Court, he said. The woman initiated judicial separation proceedings and there were other proceedings related to access and custody. He was satisfied both sides contributed to the disagreements and the 'high conflict' nature of the litigation. To their mutual credit, against a 'difficult backdrop' and medical issues, their young child is doing well, the judge said. A summary of legal costs indicated the woman's costs were about €258,000, of which €44,000 was paid, while the man's were €212,000, most of which have been paid. He estimated accountants' fees at €20,000-€30,000. Both sides must negotiate their own fee payments, the judge said. Hers are likely to be much less than the 'aspirational' €258,000 referred to, he believed. It seemed the woman would probably have qualified for legal aid but she decided not to apply, apparently in the belief the service would have been inferior to that of private lawyers, the judge said. There was 'no reason' to doubt the quality of the legal aid service and nothing to suggest there would have been any greater delays if she was represented by the Legal Aid Board, he said. Her decision not to seek legal aid was 'somewhat irresponsible' when she clearly could not afford private representation and the total resources of the marriage 'were not great', he said. Considering this factor, alongside other reasons, the judge set aside an order requiring the man to pay €61,000 towards her legal fees.
