Skyeurope: York looks to sell out; Greek and Chinese bidders circle, source says
mergermarket
Story York Capital is looking to sell both the debt and its 29% equity, it has in listed Skyeurope, a source
familiar with the matter told this news service. The value of the shares has been “virtually wiped out,” the source
said. The loans from York to the Bratislava headquartered low cost carrier comprise one bond of EUR 13m and
two loans of 15m and 11.5m a piece, he noted. It is understood that York is willing to take a loss on its investment.
Also, the value of the loans, whilst worth considerably more than the equity, are only worth 45% of their face value
if sold on the market, he said.
“We have been trying to get an investor to come in and buy out York's interest as well as inject some fresh capital,” the source said.
The buyer would not have to make a public offer but could gain a “restructuring privilege” as an exemption to a public offer, he said.
A source close to York said that there are a number of challenging issues issues at Sky - including the attitudes of both
minority investors and management. "The next few weeks are critical; as were the last few," the source added.
Rothschild has been engaged to seek an investor for Sky, the source noted. Some bidders were earlier lined up in a consortium
but the two parties had a major difference of opinion and the consortium split up. “Neither party was strong enough to bid alone
and inject new equity,” he said.
“Currently Sky is engaged in non-exclusive talks with a Greek shipping player as well as a group from China, he said, declining to
name them and adding that there is nothing firm yet and that it may not necessarily pan out with either. The source said that Sky
would welcome hearing from other potential investors who could buy out York as well as inject new capital. The routes out of Sky’s
additional bases in Prague and Vienna are profitable, he said, and the Athens route has taken off and has a lot of growth potential, he said.
The source thought that the monthly renewal period of the loans does not help to inject stability into the market view of the company
and that a longer period each time would cause less anxiety for investors. He said that York automatically renews them every month,
so a longer period would have been better.
A second source close to the situation confirmed that SkyEurope was continuing talks with two serious parties but said that at
this stage it was difficult to predict when something could be agreed. "I think it is a matter more of when and not if," he said.
This source said the interest in SkyEurope was from financial investors. It would be difficult to attract another airline to invest into
SkyEurope in the current difficult climate in the sector. There were no meaningful talks taking place with any other airline, he said.
The current difficult times did not make it easy trying to attract an investor, he said.
However, the source said SkyEurope remained an attractive investment and pointed out that it had recently secured two new planes
and two more were being added from April, while a further three were expected to be added from May.
SkyEurope Holding on 16 March announced the further extension of York Global Finance II S.a.r.l. loans had been extended for the
repayment of its EUR 15m loan granted in December 2007 and its EUR 10m loan granted in September 2008 to SkyEurope Airlines
to 15 April 2009. Both loans were due for repayment on 15 March 2009 in accordance with the loan agreements as amended.
One sector banker pointed out that it was a difficult time for any airline, even the most robust ones, to attract new investors given the
difficult conditions across the sector.
Source mergermarket