Monarch ‘seeking £35m short term financing’

Monarch Airlines is reportedly seeking tens of millions of pounds in short-term financing despite a recent return to profit.

Parent firm Monarch Holdings is looking to secure facilities totalling £35 million either from owner Greybull Capital or an outside lender, according to accounts filed with Companies House, reported by The Daily Telegraph.

It prompted the airline to issue a going concern warning in its annual report because the financing is yet to be agreed.

Monarch remains reliant on Greybull, which chief executive Andrew Swaffield insisted was not “unusual”.

“The business has been heavily returned to profit but unsurprisingly profit and cash are not the same thing,” he said.

Swaffield added that the accounts were “just simply making the point that we’re still dependent, unsurprisingly, on support from our shareholder” and that in its 2014 accounts, the carrier issued a similar warning.

Swaffield said Monarch’s return to profit prompted a decision to seek outside funding, and boutique firm HarCap has been hired to handle the search.

“We thought that this would be a good time to go out and talk to the capital markets and see if this was the right time for Monarch to seek some external funding,” he said.

However, he added that the uncertainty caused by Brexit now meant finding financing from a firm other than Greybull was “probably less likely to happen, frankly”.

Monarch needs the £35 million facility to help the airline get through the winter period, when demand to fly is at its weakest, he told the newspaper.

The travel industry has been rattled by a string of terrorist attacks over the past year. Despite that, Monarch’s boss said: “We are on track to deliver what I think will be our second most profitable year in our history.”

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