A UAE-based investor will pump up to $100 million into Silverjet, the British-based business class airline.

A memorandum of understanding entered into yesterday (April 29) provides that approximately $25 million will initially be invested directly in Silverjet by means of debt and equity by the investor, who has not been identified by the company.

“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,” a statement 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, it said.

Following recent 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, said the statement.

The directors of the company anticipate that Silverjet will enter into binding agreements in respect of this initial tranche of the investment imminently. It is anticipated that these agreements will be conditional, inter alia, upon board, and, in the case of the equity subscription, Civil Aviation Authority and shareholder approval, it said.

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, commented: “We are delighted to have entered into this memorandum of understanding with a long-term strategic investor.

“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,” Hunt said. – TradeArabia News Service