Business-only airline Silverjet insists it can withstand the collapse in its share price following news on Monday that it will have to repay a £10 million loan secured in November rather than see it converted into shares.
The carrier’s share price fell to 22p at the close of Monday and was further down at 17p on Tuesday, representing a collapse from an issue price of 112p per share in May 2006 and a high of 209p last March.
The loan was part of a £22 million funding package that Silverjet will now shoulder as debt after the financiers – property developers the Reuben brothers – said they would not exercise an option to convert the loan into shares “because of recent market conditions”.
US-owned rival business carrier Eos Airlines chose the same day to announce it would begin flying to both Silverjet’s current destinations, with a daily Stansted-New York Newark service launching on May 5 and a daily Stansted-Dubai operation on July 6. Eos already flies between Stansted and New York JFK. Silverjet flies from London Luton to New York Newark and Dubai.
Silverjet chief executive Lawrence Hunt said: “We are highly confident our February load factor will exceed 60%. Forward bookings continue to be strong.”
Hunt has consistently predicted the carrier will be operating profitably by March. However, City pressure on the business-only sector has been intense since the collapse of rival MaxJet on Christmas Eve.
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