MOB
 

IM STILL HERE MATE...........HA HA :) :)

Not wanting to sound like I'm jumping the gun or anything but if any hosties are after a job, we're desperate for hard working cabin crew.

Log on to www.britishairwaysjobs.com

If anyone wants some tips for the form PM me... :ok:

Good luck to you all, I missed the 2G shut-down by a matter of months... nasty business. :uhoh:

seems a bit too polite for the real one methinks

Anyone got any news?????

Naaa it's just some thicko with a sick sense of humour. Thinks it's clever. MOB has got much more important things to do than piss about on here, like save his job, or save an Airline.

Any News??
 

So is there any more news yet? I hope for all of you within Emerald there is something.

Everyone still in the dark about status of AOC but received news is that Emerald is due to start flying on monday. Some crew who asked have been assured verbally that they are being paid and some crews have been asked to attend Ground School refresher courses.

No formal news regarding MOB.

Lots of activity at BLK in the hangar but none around the aircraft!

I hope they are trying to get things up and running and not just busily shredding records!

Still In The Dark
 

Company E-mail still Blank.

Let hope no news is good news.

Apparently Nc is very optimistic about getting back to normal next week.MOB cannot possibly survive this if AJ wants any hope be successful in the future.

Latest rumour is they will be flying anytime between next week and 3 weeks time (I know its vague but its a possitive post) and that mob departed Weds evening with his P45 in pocket these are only rumours nothing official

That's ok mate. it is called rumour network :) I Hope it's true though, About the biggest AH on the planet that is.

Comming out of the dark.At last
 

If you ain't read your company e-mail I recommend you do. Very welcoming!!!!!

:ok: :)

Sorry to hear about all the troubles, very unnecessary, hopefully Mo'B will do the decent thing and leave aviation for good (possibly via Beachy Head!). Can't be long now before they are put into administration surely? If it hasn't already happened? I guess the troops will be the last to know. Good luck.

take a look in the news section of kpmg uk

Isn't it just easier to copy it directly to the board?!

Richard Fleming and Brian Green from KPMG Restructuring have been appointed Administrators to Emerald Airways Ltd and Emerald Airways Engineering Ltd.

Liverpool-based Emerald Airways Limited is an aviation group operating over 30 freight and passenger aircraft on scheduled and ad-hoc services throughout the UK and Europe. The firm, which employs approximately 200 employees, has an annual turnover of c£25 million.

Based at Blackpool Airport, Emerald Airways Engineering Ltd (EAEL) is a wholly owned subsidiary of Emerald Airways and is primarily responsible for the maintenance, repair and refurbishment of passenger and freight aircraft.

On 4 May 2006, Emerald Airways Ltd had its Air Operators Certificate (AOC) provisionally suspended by the Civil Aviation Authority. As a result of its fleet being grounded, the firm has been unable to generate sufficient money to cover its outgoings and has consequently been placed into administration.

Richard Fleming, Joint Administrator at KPMG Restructuring, said: “At present, we are evaluating the options for the business with a view to selling it as a going concern. However, in order to achieve a sale, it is imperative that the AOC suspension is lifted, so we will be working with the Civil Aviation Authority over the coming days to achieve this.”

He added, “We would urge any parties who are interested in acquiring the business to contact us as soon as possible.”

well judging by the other posts on here now they must be lying to you if you have had good news (No change there then)

From what I hear, it's bullsh1t that they have only gone into administration as a direct result of losing their AOC. I've heard that they has cashflow problems around a month ago which meant problems paying sub-contracted aircraft operators.

:hmm: I am reliably informed that only a Receiver can allow a company to continue 'trading' whereby it may increase its debts in the hope of a sale as a going concern. An Administrator has a duty to liquidate the assets and settle the debts. The two terms are loosly used in place of each other, so i'm not clear where Emerald stand. The first thing that happens is that trading stops - well it has, and then all employees are dismissed by reason of redundancy - which it hasn't done. If they have been in Administration since 4 May and employees have not received letters then they are being paid. Hope continues!:ok:

Just for the record
 

Here are the differences between Administration and Receivership
------------------------------------------------------------------

Insolvency and bankruptcy Administration and administrative receivership
When a company or partnership gets into financial trouble an administrator or administrative receiver may be appointed.

Administration
The role of an administrator is to get the company out of trouble and trading again if possible.

Administrators can be appointed to a company that is unable, or is likely to become unable, to pay its debts. They can be appointed by any of the following:

the courts - on application from a creditor, directors or partners
the holder of a qualifying floating charge over the assets of the business
the company or its directors
An administrator's primary goal is to rescue the company as a going concern. If this isn't possible, the administrator will try to get a better result for the creditors than would be possible if the company was wound up.

If neither of these is possible, the administrator will sell the company's property to make at least a partial payment to one or more secured or preferential creditors, such as employees or the bank.

Administration can also apply to partnerships.
-----------------------------------------------------------------------------

Administrative receivership
When a company borrows money, the lender is usually given some security over the company's assets to guarantee payment. If the company fails to keep the terms of the loan or encounters financial difficulties, the lender may be entitled to appoint an administrative receiver. An administrative receiver is an insolvency practitioner who has control of the whole, or a substantial part, of the company's property and wide powers over the business.

The administrative receiver is mainly concerned with getting back the money owed to the secured creditor. The administrative receiver may sell the assets piecemeal, or sell the whole business as a going concern to pay off the secured creditor, and the costs of the receivership.

Jet2 cargo!
 

I heard on the jungle drums that a certain Mr Meeson has been sniffing around. It's his trait, buying out companies that are struggling and then turn them around. :ok: New company to be formed called Jet2 Cargo.:sad:

Seems strange considering he sold all the F27's and A300's "because its not the way the company was going"

Anyone from Emerald heard anything?

OPFW

Thanks for the clarification, although their roles appear very similar to the layman. Both have the word Administrative, presumably reflecting the control exercised by both types of appointees?
Which situation is Emerald in, and does it matter anyway if it cannot meet its debts as they fall due and/or it has net liabilities and no new owner can be found?
Could either/both appointees recommence trading the business if the AOC is restored?
Can either allow further debts to accrue after they are appointed if they were to recommence trading?
Is it correct that the staff are still accruing pay if they have not been advised of their dismissal? :confused:

Management info given to crews attending CRM yesterday was that it would restart but implication was that only HS748 would be flying and that redundancies were innevitable.

Well what you heard is wrong.

From a financial point of view the company was not in great shape, but it was doing better, and after a review with the Bank and Accountants (with the lawyers present) they were given a clear mandate to continue the operation.

There are only TWO reasons that Emerald have now collapsed (because even with the greatest will in the world they are unlikely to survive in its present form) all created by an ego who put his own bravado before the employees and families that will suffer for his actions.....

1. The Accountable Manager continually thinking that he was better than the CAA and thinking that they would never dare pull his AOC, after all, why should he follow set down rules on the very basic functions of holding an AOC when the business of selling cheapo charters you have no crew for is far more important. Well what a fool he turned out to be.

If anyone thinks for one minute that the individual concerned was somehow victimised, I have it on good authority that he was asked THREE times to sort out the training mess and still failed to do so.

2. Years and years of late payments and battles with suppliers have come back to haunt them in a big way, now companies are only too glad to repay that attitude and are slapping writs on aircraft that could not possibly be paid quickly when there is no money coming in, on Tuesday there was a VERY good chance that JEM might have been flying by now, as every day goes by the vicious circle casued by an individuals ego can only result in oblivion being not too far off.

The only good thing that can come from this, is that certain individuals should NEVER be able to hold senior accountable positions in any UK airline again.

Dare I ask
 

Dare I ask why if the company could have been flying on Tuesday and things are no further forward who's decision is it now to implement the requirements made by the CAA to reinstate the AOC? and why are things are still going round in circles .. company wants AOC back should company not be bending over backwards to accomodate the CAA's wishes ?

Was it Spock that said "the needs of the many outweigh the needs of the few?".

Seen this time and time again in manufacturing industry.

Will the chairman do a pheonix and buy the assets he wanrs for a nominal sum and shed all the debt and liabilities to suppliers and staff. then launch emerald mk2 with the 748's and operate just as before.

yes some may point out the official possition of receivers / administractors. but there are ways around everything.

example: competitor of ours went into adminastrative receivership last year, turnover £ 1.5m, debtor book £250 k, creditors book £600 K, machinery value £250 k.
net result: started up new company with similar name, bought machinery from receiver (no one else got a look in, no option for open market auction) for £ 50 k, wiped out all debt to suppliers and tax / vat man. got out of obligation on property lease. said £ 50k went to receiver and his friend who valued machinery, made them very happy. no one else got anything.
All becaause they moved around title of assets and directors loans on such and goodwill. all legal.

Emerald may well have appealed against the CAA's decision but knowing what many, including myself, know it would seem that the CAA make a correct decision.

Then, and with immediate effect and if they hadn't started doing so already, Emerald should have set about getting their house in order and if that meant bring in a top aviation 'expert' at the top then that's what they should have done.

Instead, it seems, that they chose to waste several days, valuable days, by appealing against the CAA decision thus one, including the CAA, may interpret this that they were still refusing to accept that they had 'focked up' and would prefer to argue than accept the decision.

Talk of operations commencing anywhere between now and three weeks from now would indicate an attempt to get the house in order and to achieve this one would think that every manager is setting about getting his own department in order, after all he/she has very little else to do at this time. If this were happening then the offices would be bustling with activity, is this happening or has the towel been thrown in?

Of course there is nothing to stop a group of pilots and groundstaff doing the same thing. Form a new Holdco for £100, put together a proper articles of association and profit sharing/dividend arrangement, work out how much you value your job and are willing to risk and approach the administrators with your offer. If successful put someone in charge who has commercial nouse and good relationships with the CAA and you never now just what might happen.

And good relations with the workforce perhaps :)

Yep goes without saying really. There is no better feeling than working for yourself and knowing that everything you put in is given back in spades. From my very limited knowledge of Emerald I would say that the power of the crews and engineers should not be underestimated. Without them there is no viable business and I wouldn't expect there would be a pool of suitably qualified people to jump into their seats. If there was a willingness to do a buy out I would have thought it would be given quite serious consideration from the administrators. Even more so if it was subtly implied that the staff might not be so inclined to work for Emerald unless their proposal was accepted:)

Good idea
 

A buyout sounds a good idea, enough people have put an awful lot of effort in bailing out a sinking ship...but if they were to work for themselves - like you said no telling what could happen!

Money might be a problem, a fair bit of investment would be needed etc but no reason why a serious effort couldn't work!!!:hmm:

Yeah no idea on what sort of numbers they would be looking at. Of course a buy out doesn't have to all be in cash. Many buy outs are a mix of cash and debt or even equity. In the latter case the bank would convert its debt for shares with a mechanism for them to cash them in at some point as generally they want to get out within 1-2 years. That of course assumes that the bank is the biggest creditor, if its a supplier then a bit of coercian might secure their agreement.

You would be surprised what say 20 people putting in £100k could achieve which doesn't actually sound that much on paper or err LCD. Many buy outs actually have very little cash changing hands but security being offered to banks and repayment of debt through profits etc. Not much different to the Man U deal that the Glaziers pulled off really, although slightly smaller figures involved would be my guess:)

potkettleblack has the right idea, but some of the mechanics of finance are wrong.

Any bank behind emerald would have no interest in converting debt to shares - at most, Emerald would be worth 4-5m, based on assets.
To put that in perspective, a bank would earn that in interest, in one day, on slightly over £1bn. Bearing in mind that RBS earnt twenty odd billion in profit, 5m is peanuts and not really worth the hassle.
Also, when you hear of banks 'investing' they usually arent directly taking shares in companies - typically they will be underwriting a share issue, debt provision or credit line. To say that RBS or whoever is behind Emerald would take a share is the equivalent of saying that Mastercard own a share in me cos i havent paid the bill.

Now, you are assuming that the bank would value the aircraft / offices / spares at the same rate as the owners do on their balance sheet? That is incorrect too.
There are many airlines that leverage finance against an aircraft for its commercial or resale value.

How do you value an aircraft type that is operated by maybe one or two other carriers around the world? It either has a) scarcity value (Such as the AN124s), or b)Junk value - such as the dodgier russian types.
So lets assume that Emerald have valued the aircraft at insurable rates. That puts a well maintained 748 at about $900,000in value. However market value for acquisition is about...wait for it....50% of that.
So the bank are immediately being asked to invest in a business with assets that are possibly overvalued, have literally no resale value, and can only be operated by a group of very select individuals (The trained pilots and mechanics of Emerald). Fine and dandy say the fly boys, we will do a good job - but the aviation industry proves otherwise. Pilots are constantly arguing for higher wages, less hours etc etc. All reasonable enough to you guys, but not to the financier.

Now before you all go mental at me, you have to remember who has the money to invest (The financier/Bank) and who wants it (The chaps looking to buy the airline), its all about vested interests, and who holds the purse strings.
Put yourself in the banks shoes - if they remain behind Emerald, they will be held at the mercy of a bunch of whining aircrew and engineers who want the latest gadgets for the aircraft, and dont want to fly too many hours. They will also be the owners of technically worthless assets, with little if any chance of resale.
Now in the pilots and engineers shoes, you are being held at the mercy of a bloodsucking venture capitalist or money grabbing bank, who has done nothing to help the airline out of its current predicament.

So ignoring alll of that, you mention that buyouts usually involve debt - very true. These deals are referred to as leveraged buyouts.
To give you an example. i want to buy a bakery, that takes in 2k profit a month (24 a year). It gets valued at 72k by the lawyers - fine and dandy. Now for me to acquire this, i dont need to find 72k. I need to work out what the payments are to service 72ks worth of debt a month. So lets assume that that figure comes out at 1800 per month loan repayment over 5 years. We all agree, and ive picked up the company, and 200 quid a month income for putting exactly how much money down?

Now this deal only works if the company that i am acquiring has one of two things: a) no debt at all or b) strong enough cash flow to support my debt.

Whats the bets that Emerald has either of these qualities?


That all sounds fairly bleak, but Pot has the right sentiment - if enough people actually put their hands in their pockets, finance can be found. Its called lock in money - if me as a bank knows that the company failing is really going to hurt you financially as an individual, i am more inclined to think you will work your nuts off to make it suceed, and consequently i am far more inclined to come to an arrangement to back your buyout.

my fingers hurt so im stopping typing now.

Also if the company is liqudated (Or placed in administration) you can write to the administrator and DTI as a creditor, demanding further investigation into the conduct of the directors of the company.
If any of them are found to have prejudiced the creditors or the operations of the company in any way, then they can be struck off as directors, and found personally liable.
FYI if you are owed a salary at the time of the company being foreclosed, you are a creditor (It still owes you money).

Sorry to spoil the fun, but I hear there are at least two potential interested parties waiting in the wings.

Only one of these I hear is in the same line of business and is NOT interested in 3 a/c types.

I sense the bits that are worth anything could be flogged to several buyers.

2 interested parties, neither are aircraft operators at present.....

Are you sure ?

I hear one is 'connected' to a current UK operator/lessor ?

Yup - not operators.

i heard the same one outfit wants the ATP's and the other the cargo maybe they could buy emerald and split the operation?

Erm, yeah right. I really hate willy waving but your a cargo charter manager and me well I did this very thing in the City for about 8 years. One thing I have learnt about finance is that there are no such thing as "rules" or what you can get away with in situations like this. Another thing is to write in a manner that your audience will understand. I could have mentioned MBO and leveraged buy out but the pilot/engineer/groundcrew audience of this thread would have fallen asleep by now:)

If your a bank/supplier/whoever with your back against a wall you would be surprised what people are willing to accept. To outsiders accepting 30-40p in the pound might be unreasonable yet to a bank with a debt book in the billions it will be an acceptable loss to take.

The value of the a/c is really a secondary issue. Assuming the bank is the main creditor we are dealing with then their sole aim is to recover their debt. In undertaking an MBO all you are really doing is asking them to keep a portion (or all) of their debt in. Whether this is as a mix of debt or equity is semantics although doing it as a mix will enable the company a degree of breathing space and provide improved operating cashflow. In return typically the bank will go for security from the people behind the MBO such as 2nd mortgages etc. By putting in place a management team with a proven track record then you give the bank confidence that they will get their debt repaid according to the repayment schedule.

Your points about whingeing pilots and engineers etc are a bit naive. The mechanics of how the new Holdco operates is all dealt with in the business plan that will be agreed with the bank in anycase. It will include any capital expenditure plans and deal with whatever "gadgets" you can think of or not as the case may be. Having a CEO & management team that shows commercial experience of the freight market and impresses the bank will be key as will presentations to the past customers to win the contracts back which will no doubt be an integral part of a successful deal going ahead. As will presentations to the existing staff securing their support for the deal and ensuring their buy in.

Anyway there are many ways to skin a cat so to speak so no real point in discussing semantics until such time (if ever) that someone fronts up and if necessary we can all chip in with some advice.

The problem for 'Emerald Bakery' is that the shop is closed because Health & Safety' have found a rat's arse in a French Stick. The customers are now looking to shop elsewhere on the High street. The suppliers, although used to being paid persistantly late may not want to write off the debt to the previous owner and allow new debt to pile up with the new owner. Not all the staff are going to hang around to see if a new owner can be found and whether or not they have escaped the redundancy list, which they know is being drafted as they await their fate. The staff having been poorly paid for years couldn't raise a whip-round let alone venture capital.

Sorry, maybe i should change my profile to detail what i do now. Did i mention i work in venture capital? sorry, my mistake.

With regards to my being 'naive' i think you need to take a deep breath and read the post again. It illisutrates the different points of view on this issue.

By placing second mortgages on properties, you are really just reiterating what i mentioned in my post:
''Its called lock in money - if me as a bank knows that the company failing is really going to hurt you financially as an individual, i am more inclined to think you will work your nuts off to make it suceed, and consequently i am far more inclined to come to an arrangement to back your buyout.''

Emerald is a fairly unique situation, with an odd aircraft fleet, large company engineering setup and mindset with small aircraft numbers, very well trained staff who have lost an AoC over training issues, and an odd management oversight system.

Also, debt and /or equity are not semantics - thats a very silly comment. Equity costs nothing to service, and does not affect cash flow. Debt requires servicing, and therefore draws money out of the company.