All parties involved in talks to save Monarch Group remain confident a deal can be reached before Friday when its licence to sell holidays is due to expire.
Talks are continuing between London investment fund Greybull Capital to buy the group from Switzerland’s Mantegazza family in a deal worth £75 million.
Sources close to the negotiations said efforts were being made by all parties to ensure a deal can be concluded this week.
No one was prepared to comment on suggestions in the Sunday Times that the process had been complicated by a need to agree terms with unions, aircraft lessors and the Pension Protection Fund (PPF), the government-backed agency that takes on retirement plans from stricken companies.
Monarch’s pension scheme has a deficit estimated at more than £150 million. It is understood the PPF will take a 10% stake in the airline as part of a restructuring plan that will see the fund take over responsibility for the scheme, the newspaper reported.
It is thought the Mantegazzas will have to inject tens of millions of pounds into the scheme to help the transfer.
About 700 staff have reportedly already agreed to take redundancy, while pilots and other employees have agreed reduced terms and conditions involving pay cuts of up to a third.
The troubled company needs to make 900 job losses as part of the turnaround plan that also includes at least 10 aircraft being taken out of the 42-strong Monarch Airlines fleet.
Talks continue with aircraft lessors, although it is understood that New York-based leasing company AerCap has agreed new terms on 11 aircraft, according to the Sunday Times.
The negotiations are ongoing against a backdrop of continued strong trading for the business, according to industry sources.
The Civil Aviation Authority has extended Monarch’s Atol until Friday to allow the rescue talks to continue. The authority is closely involved in the talks as any deal would have to have its approval. Travel Weekly understands the regulator is ‘relaxed’ about how negotiations are proceeding.
Monarch Group chief executive Andrew Swaffield made the last public statement on the restructuring plans on September 24, saying: “Further hurdles are still to be overcome; however we have also secured major agreements with aircraft lessors and commitments on future investment from Greybull. This is firm progress for Monarch, its employees and for its customers.”
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