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Vulture fund in talks to bail out Monarch airline
Greybull bid for ailing charter carrier could save 3,000 jobs — and thousands of holidays
Dominic O’Connell Published: 21 September 2014
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Monarch: thousands of jobs at riskMonarch: thousands of jobs at risk
A SECRETIVE investment fund has emerged as the surprise likely saviour of Monarch, the holiday airline that faces a cash crisis. A deal would save thousands of jobs at Monarch — and the vacation plans of thousands of holidaymakers.
Greybull, best known in Britain for its role in the controversial takeover and restructuring of the electricals retailer Comet two years ago, is in talks with Monarch’s owner, Switzerland’s Mantegazza family.
The Mantegazzas, who have already pumped about £115m into the airline in recent years, are understood to be offering a £70m dowry to help clinch the deal.
Other bidders are still circling, including Elliott, the aggressive American hedge fund that recently helped force Argentina into a partial default on its sovereign debt.
Sources close to the talks said Greybull was favourite, but cautioned that it was still possible no agreement would be reached. The airline has a big pension deficit - at least £150m — and talks with pilots on new terms and conditions are at a sensitive stage. Without a deal Monarch would face an uncertain future, with accountants at PwC on standby should it be forced into administration.
The 47-year-old airline is a stalwart of the British holiday scene, carrying 6m passengers a year to destinations in the Mediterranean and beyond. It is based at Luton airport, and with its aircraft maintenance division and Cosmos tour operator arm, has 3,300 employees.
Andrew Swaffield, the chief executive recruited in April from British Airways’ parent company IAG to run the airline, has drawn up a drastic restructuring plan to shed 1,000 jobs, stop charter flights and cut the fleet from 42 to 30 aircraft.
The Civil Aviation Authority, which licenses airlines and tour operators, has kept in close contact with the airline in recent months as it has struggled to find a buyer. The regulator is understood to have compiled a watchlist of holiday operators that would be affected if Monarch ceased flights.
Greybull, one of a clutch of “vulture funds” that have prospered since the financial crisis, has emerged as a powerful force in corporate Britain in recent years. It stayed out of the spotlight, however, until two years ago when it was unmasked as one of the backers of the controversial buyout of Comet. Months later the electricals retailer went bust with the loss of 6,500 jobs.
Recently Greybull made an abortive attempt to buy the Murco oil refinery at Milford Haven.
The firm is run by brothers Marc and Nathaniel Meyohas and longstanding family friend Richard Perlhagen. “We are a family-owned, family-run business with interests everywhere,” Marc Meyohas told The Sunday Times in a rare interview in March.
Greybull, which operates from an office in the West End of London, was set up to invest the wealth of the two families, whose ties go back 40 years. The brothers’ father was a corporate lawyer in France while Perlhagen’s father built up and sold his pharmaceuticals empire in Sweden for tens of millions.
Greybull has put money into several British companies. Those that those that are known about include Metalrax, a Birmingham engineer, Plessey Semiconductors and Arc Specialist Engineering.
Nathaniel Meyohas said in March: “We are looking for unsteady companies. Our investments require either refinancing, growth capital, or are unloved parts of bigger corporates.”
Monarch declined to comment. Greybull could not be reached for comment.