Monarch linked to third refinancing in six years

Monarch linked to third refinancing in six years

The Monarch Group has refused to comment on a report that it is lining up a third multi-million pound cash injection from its billionaire Swiss owners in six years.

The latest talks with the Mantegazza family over what the Sunday Telegraph reported to be a £60 million refinancing are said to be linked to a £1.75 billion order for new aircraft.

The order, for 30 new Boeing 737 Max 8, was announced last week during the Farnborough Air Show.

Monarch Group, which owns Monarch Airlines, tour operator Cosmos, seat-only supplier Avro and bed bank Somewhere2stay, was last refinanced in 2011.

At that time its owners, led by Sergio Mantegazza, pumped £75 million into the business. This followed a £45 million recapitalisation just two years previously.

The Sunday Telegraph said the latest talks over equity come amid tough trading in the holiday industry amid fears of over-capacity, rising costs and declining yields.

It claimed sources have told it that during debt financing talks over the Boeing deal it became apparent that the firm needed further equity.

The Sunday Telegraph said a Monarch Group spokesman declined to comment.

Despite raising concerns about the state of trading the Sunday Telegraph said that Monarch Airlines is on the road to recovery.

It reported a £5.9 million pre-tax profit in the year to October 2013, after a £33 million loss in the prior year but was said to have been hit by a weak market and competition from low-cost rivals.

The Monarch Group is one the UK’s biggest travel firms behind the big two, Tui Travel and Thomas Cook.

Avro is the eighth-largest Atol holder, behind On The Beach and BA Holidays, while Cosmos is the ninth just ahead of Olympic Holidays in the top 10.

Sourced from Travel Weekly

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