Monarch - 3
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Monarch operating Business as usual tomorrow according to Twitter, so either the sale is completed or the CAA have extended their license. Going to announce the news in a few hours.
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Monarch secures ₤125 million of permanent capital and liquidity facilities through sale to Greybull Capital
24/10/14
Monarch achieves ₤200 million annual reductions – facilitating network restructuring and permanent competitive cost structure
THE BOARD of Monarch Holdings Limited (“Monarch” or the “Group”), the UK’s leading independent leisure travel group, is pleased to announce today the completion of its strategic review and restructuring programme under which it has secured ₤125 million of permanent capital and liquidity facilities provided by Greybull Capital LLP (“Greybull”) anchored by a ₤50 million capital commitment, with contributions from the Group’s prior shareholders, principally the Mantegazza family. Greybull also acquired 90% ownership interest in Monarch, with the remaining 10% passing to the Group’s defined pension scheme and ultimately the Pension Protection Fund (“PPF”).
The Civil Aviation Authority has renewed the Group’s ATOL licence.
Greybull is a family office that manages investments in private companies across a diversified range of industry sectors. Greybull will provide significant capital to Monarch in order to grow the Group and build on its long-established heritage and trusted brand name.
Under the leadership of new Chief Executive Andrew Swaffield, Monarch has undertaken a comprehensive strategic review of all areas of the business, from operations to ownership and financing. The aim of the review has been to create the optimum structure to realise the significant opportunity to build on Monarch’s respected brand and distinctive offer to its customers in the European scheduled leisure carrier market.
The main outcomes of Monarch’s strategic review and restructuring, which have led to the successful transaction with Greybull, are:
Optimise fleet from 42 to 34 aircraft, and revised agreements with lessors to either mark-to-market or early return of 10 aircraft from the current fleet
Securing a new Boeing fleet order for 30 737 MAX 8 aircraft with deliveries from 2018 to 2020, providing a cost-effective and uniform fleet by late 2020
Both long-haul and charter flying to end by April 2015
Airline network to specialise on Monarch’s ‘heartland’ of scheduled short-haul European leisure routes, with increased average frequencies, aircraft utilisation, productivity and profitability
Focus on five UK airport bases – London Gatwick, Manchester, Birmingham, London Luton and Leeds-Bradford – and closure of East Midlands from summer 2015
Material concessions agreed with employees across the Group to enable the successful restructuring, including reductions in pay of up to 30%, with more than 90% of unionised staff voting to accept changes, and some 700 redundancies, two-thirds of which were voluntary
Reduction of the Group’s operating cost base, in line with other low-cost carriers, and increased efficiencies across the business
Resolution of the Group’s pension deficit through agreement with the Pensions Regulator, PPF and the Trustee of the Monarch Airlines Limited Retirement Benefits Plan which will result in the Plan being assessed for entry into the PPF. The PPF would then hold a 10% stake in the Group, in line with its principles in restructurings such as this. The Pensions Regulator has cleared the restructuring. The pension deficit as per the company’s balance sheet was previously £158 million and the current estimated shortfall to secure full benefits is around £660 million.
Monarch Group CEO, Andrew Swaffield, said:
“I am delighted to welcome the Greybull team as the new owners of the Monarch Group. We have a shared vision for the strategic direction and prospects for the business, and I am looking forward to working with them to implement the exciting plans for building our future.”
“I would personally like to thank all Monarch employees who have been hugely supportive of the initiatives which were essential to complete this transaction. I am very proud to be leading such a team – together we will be building a great future for the Group.”
Commenting on behalf of the selling shareholders, Fabio Mantegazza said:
“We are very proud to have created one of the most loved aviation brands in the UK over the last 46 years. We think that now is an appropriate time to allow new shareholders to take Monarch into the future, with secure financial backing and clear strategic goals and we wish the Group every success.”
Said Greybull Partner Marc Meyohas:
“We are delighted to acquire Monarch and invest our capital into a very strong brand with great potential in all its markets and are grateful for the selling shareholders’ support in achieving this transaction. We see this as a long-term investment and hope we can be very supportive shareholders throughout Monarch’s next chapter.”
Advisers:
Seabury Securities (UK) Ltd., a unit of Seabury Group, acted as lead investment banker, along with co-adviser Dean Street Advisers, to the Monarch Group on the transaction with Greybull Capital LLP. Seabury Advisors LLC served as Monarch’s lead restructuring adviser and industrial consultant with respect to crafting the turnaround plan with Monarch’s management group. KPMG LLP and Short Partners LLP served as additional restructuring advisers. Freshfields Bruckhaus Deringer LLP and Bird and Bird LLP served as legal advisers to Monarch.
Greybull was advised by Zolfo Cooper LLP as financial adviser and Forsters LLP as legal counsel.
PricewaterhouseCoopers served as adviser to the selling shareholders.
Notes to Editors:
About Monarch’s strategic review
In August 2014, Monarch confirmed it was undergoing a strategic review with the objective of determining the optimal structure to take the company forward. The Group sees a significant opportunity to build on the respected Monarch brand and distinctive customer offer, in order to create a focused and efficient scheduled European leisure carrier. Part of this strategy involves a major investment into its aircraft fleet. In July 2014, Monarch announced Boeing was the preferred bidder for its narrow-bodied fleet replacement, with 30 Boeing 737 MAX 8s for delivery from Q2 2018. At current list prices, this aircraft deal would be worth $3.1 billion. This transformational investment will enable Monarch to operate as efficiently as any European low-cost carrier.
As part of the strategic review, the Board of Monarch identified a number of cost-reduction initiatives that needed to be addressed in order to compete effectively in its chosen markets, specifically the scheduled European short-haul leisure market. With the strong support of all of Monarch’s stakeholders, including its employees, unions, third-party suppliers and regulators, a number of initiatives were set in motion and have been agreed to create a far stronger Group.
About Greybull Capital LLP
Greybull has private equity investments in various sectors including pharmaceuticals, semiconductors, energy, industrials, retail and leisure. It is a long-term active investor with significant or controlling stakes in all of its companies. Within its portfolio Greybull owns significant assets including:
Plessey Semiconductors Limited, where since 2010 Greybull has supported management’s plans to restructure and re-develop the company and has financed add-on acquisitions
New Era Petroleum Inc. Since 2010 Greybull has backed New Era with both working capital to develop its activities and capital to acquire and re-develop oil fields in the US
Arc Specialist Engineering Limited is a conglomerate of businesses in the steel industry. Greybull fully financed Arc and has been successfully trading the company since becoming its majority shareholder in 2013
24/10/14
Monarch achieves ₤200 million annual reductions – facilitating network restructuring and permanent competitive cost structure
THE BOARD of Monarch Holdings Limited (“Monarch” or the “Group”), the UK’s leading independent leisure travel group, is pleased to announce today the completion of its strategic review and restructuring programme under which it has secured ₤125 million of permanent capital and liquidity facilities provided by Greybull Capital LLP (“Greybull”) anchored by a ₤50 million capital commitment, with contributions from the Group’s prior shareholders, principally the Mantegazza family. Greybull also acquired 90% ownership interest in Monarch, with the remaining 10% passing to the Group’s defined pension scheme and ultimately the Pension Protection Fund (“PPF”).
The Civil Aviation Authority has renewed the Group’s ATOL licence.
Greybull is a family office that manages investments in private companies across a diversified range of industry sectors. Greybull will provide significant capital to Monarch in order to grow the Group and build on its long-established heritage and trusted brand name.
Under the leadership of new Chief Executive Andrew Swaffield, Monarch has undertaken a comprehensive strategic review of all areas of the business, from operations to ownership and financing. The aim of the review has been to create the optimum structure to realise the significant opportunity to build on Monarch’s respected brand and distinctive offer to its customers in the European scheduled leisure carrier market.
The main outcomes of Monarch’s strategic review and restructuring, which have led to the successful transaction with Greybull, are:
Optimise fleet from 42 to 34 aircraft, and revised agreements with lessors to either mark-to-market or early return of 10 aircraft from the current fleet
Securing a new Boeing fleet order for 30 737 MAX 8 aircraft with deliveries from 2018 to 2020, providing a cost-effective and uniform fleet by late 2020
Both long-haul and charter flying to end by April 2015
Airline network to specialise on Monarch’s ‘heartland’ of scheduled short-haul European leisure routes, with increased average frequencies, aircraft utilisation, productivity and profitability
Focus on five UK airport bases – London Gatwick, Manchester, Birmingham, London Luton and Leeds-Bradford – and closure of East Midlands from summer 2015
Material concessions agreed with employees across the Group to enable the successful restructuring, including reductions in pay of up to 30%, with more than 90% of unionised staff voting to accept changes, and some 700 redundancies, two-thirds of which were voluntary
Reduction of the Group’s operating cost base, in line with other low-cost carriers, and increased efficiencies across the business
Resolution of the Group’s pension deficit through agreement with the Pensions Regulator, PPF and the Trustee of the Monarch Airlines Limited Retirement Benefits Plan which will result in the Plan being assessed for entry into the PPF. The PPF would then hold a 10% stake in the Group, in line with its principles in restructurings such as this. The Pensions Regulator has cleared the restructuring. The pension deficit as per the company’s balance sheet was previously £158 million and the current estimated shortfall to secure full benefits is around £660 million.
Monarch Group CEO, Andrew Swaffield, said:
“I am delighted to welcome the Greybull team as the new owners of the Monarch Group. We have a shared vision for the strategic direction and prospects for the business, and I am looking forward to working with them to implement the exciting plans for building our future.”
“I would personally like to thank all Monarch employees who have been hugely supportive of the initiatives which were essential to complete this transaction. I am very proud to be leading such a team – together we will be building a great future for the Group.”
Commenting on behalf of the selling shareholders, Fabio Mantegazza said:
“We are very proud to have created one of the most loved aviation brands in the UK over the last 46 years. We think that now is an appropriate time to allow new shareholders to take Monarch into the future, with secure financial backing and clear strategic goals and we wish the Group every success.”
Said Greybull Partner Marc Meyohas:
“We are delighted to acquire Monarch and invest our capital into a very strong brand with great potential in all its markets and are grateful for the selling shareholders’ support in achieving this transaction. We see this as a long-term investment and hope we can be very supportive shareholders throughout Monarch’s next chapter.”
Advisers:
Seabury Securities (UK) Ltd., a unit of Seabury Group, acted as lead investment banker, along with co-adviser Dean Street Advisers, to the Monarch Group on the transaction with Greybull Capital LLP. Seabury Advisors LLC served as Monarch’s lead restructuring adviser and industrial consultant with respect to crafting the turnaround plan with Monarch’s management group. KPMG LLP and Short Partners LLP served as additional restructuring advisers. Freshfields Bruckhaus Deringer LLP and Bird and Bird LLP served as legal advisers to Monarch.
Greybull was advised by Zolfo Cooper LLP as financial adviser and Forsters LLP as legal counsel.
PricewaterhouseCoopers served as adviser to the selling shareholders.
Notes to Editors:
About Monarch’s strategic review
In August 2014, Monarch confirmed it was undergoing a strategic review with the objective of determining the optimal structure to take the company forward. The Group sees a significant opportunity to build on the respected Monarch brand and distinctive customer offer, in order to create a focused and efficient scheduled European leisure carrier. Part of this strategy involves a major investment into its aircraft fleet. In July 2014, Monarch announced Boeing was the preferred bidder for its narrow-bodied fleet replacement, with 30 Boeing 737 MAX 8s for delivery from Q2 2018. At current list prices, this aircraft deal would be worth $3.1 billion. This transformational investment will enable Monarch to operate as efficiently as any European low-cost carrier.
As part of the strategic review, the Board of Monarch identified a number of cost-reduction initiatives that needed to be addressed in order to compete effectively in its chosen markets, specifically the scheduled European short-haul leisure market. With the strong support of all of Monarch’s stakeholders, including its employees, unions, third-party suppliers and regulators, a number of initiatives were set in motion and have been agreed to create a far stronger Group.
About Greybull Capital LLP
Greybull has private equity investments in various sectors including pharmaceuticals, semiconductors, energy, industrials, retail and leisure. It is a long-term active investor with significant or controlling stakes in all of its companies. Within its portfolio Greybull owns significant assets including:
Plessey Semiconductors Limited, where since 2010 Greybull has supported management’s plans to restructure and re-develop the company and has financed add-on acquisitions
New Era Petroleum Inc. Since 2010 Greybull has backed New Era with both working capital to develop its activities and capital to acquire and re-develop oil fields in the US
Arc Specialist Engineering Limited is a conglomerate of businesses in the steel industry. Greybull fully financed Arc and has been successfully trading the company since becoming its majority shareholder in 2013
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They better not let all those years of hard work, dedication and professionalism go to waste for the sake of short term gain. Monarch staff past and present have sacrificed SO much for the sake of a continued future. My best wishes go to all concerned.
Last edited by Whiskey Zulu; 25th Oct 2014 at 06:23.
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If the effort put in by everyone in the last couple of months is continued, then we've got a chance.
It's been painful and that won't end on Monday, as more good people leave in the near future, but there is hope. We'll just have to see what the exact plan is going forward.
It's been painful and that won't end on Monday, as more good people leave in the near future, but there is hope. We'll just have to see what the exact plan is going forward.
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Lets not forget smoke and mirrors.....
Tread carefully. I wish all at Monarch the very best of luck. I was once a very small part of the airline in the 80's and know first hand what a great company it is, has been and could be.
Tread carefully. I wish all at Monarch the very best of luck. I was once a very small part of the airline in the 80's and know first hand what a great company it is, has been and could be.
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Monarch's 'heartland' must surely be the business it was founded and grew over the years, namely charter. remembering especially those who were partly responsible for that and sadly no longer being with us. What the airline has and will continue to developed in to is something different.
I wish all at Monarch a long and profitable future.
I wish all at Monarch a long and profitable future.
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monarch
"Both long-haul and charter flying to end by April 2015
Airline network to specialise on Monarch’s ‘heartland’ of scheduled short-haul European leisure routes, with increased average frequencies, aircraft utilisation, productivity and profitability"...........
Just a thought,but wont this put them directly head to head with ryanair?
Airline network to specialise on Monarch’s ‘heartland’ of scheduled short-haul European leisure routes, with increased average frequencies, aircraft utilisation, productivity and profitability"...........
Just a thought,but wont this put them directly head to head with ryanair?
Agreed they will be going head to head not only with Ryan air but Jet 2, Easy Thomson and to some extent Flybe especially as they will be joining the 737 fleet. Now they have dropped the IT and long haul arm I really hope the marketing and planning people know what they are taking on as they have a hell of an upward job competing in an already established low cost market. These are the key departments that need to have their heads screwed on in order to succeed.
Good luck to all concerned.
Good luck to all concerned.
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Pabely,
Well its a relief that the airline continues;
However Im told from others who have had dealings with Grey Bull before that allegedly they tend to fatten the best bits of companies up, then sell them off in parts to the highest bidders.
Perhaps this press release is only partial as it makes no mention from Grey Bull about the future of Cosmos or MAEL ?
Im keeping my fingers crossed that they are really interested in aviation ,preserving the great Monarch name long term, and not planning to sell bits off..
Suppose time will tell .
Monarch have for many years been quite cozy with the Swiss family more than happy until recently to bail the airline out.
Now the airlines protection is lifted and they now don't have that safety net and will have to fend for themselves.
Sure we all wish them well in finding a niche and being able to keep the other LCC pack of Wolves off them, in this challenging market.
Well its a relief that the airline continues;
However Im told from others who have had dealings with Grey Bull before that allegedly they tend to fatten the best bits of companies up, then sell them off in parts to the highest bidders.
Perhaps this press release is only partial as it makes no mention from Grey Bull about the future of Cosmos or MAEL ?
Im keeping my fingers crossed that they are really interested in aviation ,preserving the great Monarch name long term, and not planning to sell bits off..
Suppose time will tell .
Monarch have for many years been quite cozy with the Swiss family more than happy until recently to bail the airline out.
Now the airlines protection is lifted and they now don't have that safety net and will have to fend for themselves.
Sure we all wish them well in finding a niche and being able to keep the other LCC pack of Wolves off them, in this challenging market.
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The messages on here claim that the cost base has been corrected to the effect that it is in the comparable with other low cost airlines, which strikes me as quite a spurious claim given the broad array of cost bases that the low cost airlines have.
There is no clear point of difference , and while some will say it is the brand and the legacy, what does this amount to? Not a lot when you consider that they have stated the ticket price is king.
The key over arching assumption is that cash rich competitors won't emark on a plan to hurt a recovering Monarch. Ryanair, easyJet and Jet2 all come to mind.
Each of these airlines lead in some area, ryanair on cost , scale and bank balance , easyJet on primary airports , scale and bank balance and Jet2 on holiday proposition , low cost due to older cheaper ac and by association affordability to cut winter capacity at minimal cost.
Until Mon develop a strategy that gives it leadership or sustainability in some area(s), I remain sceptical.
Good luck to all MON employees, you have compromised a lot, and deserve to do well.
There is no clear point of difference , and while some will say it is the brand and the legacy, what does this amount to? Not a lot when you consider that they have stated the ticket price is king.
The key over arching assumption is that cash rich competitors won't emark on a plan to hurt a recovering Monarch. Ryanair, easyJet and Jet2 all come to mind.
Each of these airlines lead in some area, ryanair on cost , scale and bank balance , easyJet on primary airports , scale and bank balance and Jet2 on holiday proposition , low cost due to older cheaper ac and by association affordability to cut winter capacity at minimal cost.
Until Mon develop a strategy that gives it leadership or sustainability in some area(s), I remain sceptical.
Good luck to all MON employees, you have compromised a lot, and deserve to do well.
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Monarch boss: 'We'll be debt-free within three years' - www.travelweekly.co.uk
£4.5 million gone already? ???????????????? > http://www.travelweekly.co.uk/Articl...t+monarch.html
£4.5 million gone already? ???????????????? > http://www.travelweekly.co.uk/Articl...t+monarch.html
Last edited by 111KAB; 28th Oct 2014 at 07:19. Reason: Additional question marks added as some cannot see!