Monarch Aircraft Engineering falls into administration.

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Ex-Ascot
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Monarch Aircraft Engineering falls into administration.

#1 Post by Ex-Ascot » Fri Jan 04, 2019 12:19 pm

Oh dear. https://www.bbc.com/news/uk-england-bed ... s-46758200

What a shame. Thought that they would survive after Monarch Airlines went down. Monarch was a great company to work for.
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Re: Monarch Aircraft Engineering falls into administration.

#2 Post by Boac » Fri Jan 04, 2019 1:09 pm

Always had a good reputation for their work.

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Re: Monarch Aircraft Engineering falls into administration.

#3 Post by Cacophonix » Fri Jan 04, 2019 1:39 pm

Greybull Capital seem to have been singularly unsuited to run any aviation related business whatsoever! Asset strippers perhaps? They certainly stink as the details relating to the airline hiighlight.

https://en.wikipedia.org/wiki/Greybull_ ... lvent_2017

Monarch; airline, acquired 2014; insolvent 2017
Greybull purchased 90% of Monarch Holdings Ltd, a UK airline, trading as Monarch, 25 October 2014 in return for £50m capital commitment: the remaining 10% passed to Monarch's pension scheme. Greybull Capital's partner Marc Meyohas said in a press release: "We are delighted to acquire Monarch and invest our capital into a very strong brand with great potential" : Greybull's investment secured £125m of capital and liquidity facilities; Restructuring involved reducing its aircraft from 42 to 34, 700 redundancies and wage reductions. The Financial Times reported, that since Greybull bought Monarch, the airline has been transformed. Monarch delivering its 1st profit in three years in 2015. Greybull employed Deutsche Bank in April 2016 to 'explore strategic options for Monarch Airlines', including growth opportunities in Europe and selling it. Monarch Airlines seeking in June 2016 to secure £35m either from Greybull or a 3rd party. Amid rumors of imminent bankruptcy in September 2016 Monarch's ATOL aviation insurance was extended for 2 weeks by fresh investment, and by then, £165m of Greybull investment renewed Monarch's annual licence.

Monarch ceased trading on Monday 2 October 2017, leaving 860,000 passengers without flights and is Greybull’s third venture that has failed. Greybull Capital's founder, Marc Meyohas, blamed sterling’s weakness, Middle East terrorism and Brexit for the airline’s demise. The biggest in British aviation history.

During administration, it was reported that Greybull's losses were limited, as Monarch had £48m cash in bank, and £60m of landing slots to sell. After administration, it was reported that most of Monarch's £165m bailout had come from Boeing and not as reported, from its owner Greybull. Boeing injected more than £100m into Monarch’s offshore holding company, 'Petrol Jersey'. Boeing's cash injection arose from an order of 32, 737 Max planes, finalised after Greybull's acquisition. None had been delivered when Monarch liquidated. Greybull responded that financing details were 'commercially confidential'.

Monarch's liquidation will be debated in Parliament, week commencing 9 October. Sir Vince Cable, MP, said: “The lack of transparency is shocking. Customers, staff and taxpayers deserve to know how Monarch was funded"

Greybull acquired Monarch Aircraft Engineering Ltd (MAEL) as a part of Monarch Airlines. MAEL announced, it was not part of the liquidation and would continue as a standalone business, employing over 730 staff[38] The FT reported that Boeing had paid £10-15m into a joint venture involving Monarch’s engineering services unit, which was not placed in administration.

The transport minister urged Greybull to contribute towards the £60M bill of repatriating Monarch's 110,000 stranded passengers. The FT reported that some initially suggested that Greybull lost £250M in Monarch's collapse, but they calculated that Greybull, as preferential creditor and owner of MAEL, worth about £60M, may walk away with a £15M profit from the liquidation, leaving staff, customers and tax-payers to stump up the shortfall.
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Re: Monarch Aircraft Engineering falls into administration.

#4 Post by Cacophonix » Fri Jan 04, 2019 1:52 pm

David Pike, Ben Leith and David Standish from KPMG’s Restructuring practice have been appointed Joint Administrators of Monarch Aircraft Engineering Limited (MAEL) on the 4 January 2019, at the request of the directors.

Established in 1967 and headquartered at London Luton Airport, MAEL employs approximately 553 staff across the UK and Europe, providing aircraft maintenance
services across four main divisions – base maintenance, line maintenance, fleet technical support, Continuing Airworthiness Management Organisation (CAMO) and a training academy.

The company completed a restructuring in October 2018, following which a number of MAEL’s customers sought alternative suppliers. This presented the business with significant challenges, making it unsustainable in its present form. On 14 December 2018, MAEL therefore announced that it was in talks with potential partners with a view to selling all, or parts of, the business.
Earlier this week, MAEL announced the transfer of the majority of its line maintenance operations to a number of different parties, thereby protecting jobs and ensuring continuity of service for the airlines that use those facilities on a daily basis:

MAEL’s UK line maintenance operations at Gatwick, Birmingham, East Midlands, Newcastle and Glasgow Airports have largely transferred to Morson Group, with the Luton Airport line maintenance operations transferring to Storm Aviation. Certain Gatwick-based employees have also transferred to Boeing.

Further operations at Manchester and Birmingham Airports, including related employees, were transferred to Flybe following the cessation of their maintenance contract in late November 2018.

Collectively, these acquisitions ensure continuing employment for 182 of MAEL’s employees.

The base maintenance business undertakes aircraft overhaul and major heavy maintenance programmes from hangers in Luton and Birmingham. This is the activity that suffered most from the loss of key customers following the October 2018 restructuring. Unfortunately, with significant losses being incurred on this activity and with no offer having been received, operations will be suspended immediately, resulting in the redundancy of c.250 employees. The administrators will be seeking a purchaser for the base maintenance facilities and will be working with the small number of base maintenance customers affected by this cessation of trade.

All remaining activities of MAEL continue to trade whilst the administrators seek buyers. These are:

The CAMO division, which has 27 employees and provides the continuous upkeep of airworthiness records and scheduled maintenance requirements for 33 aircraft across eight customers.
The training academy, which comprises an engineering training school based out of Luton with a total of seven employees, and an apprenticeship programme with 53 trainees. The administrators are seeking to sell the training school and intend to retain the apprentices for a period while assisting them in finding new apprenticeship placements.

The remaining c.200 MAEL staff are largely Luton based. Regrettably, the majority will be made redundant with 83 employees retained to support the wind down of the business, in addition to those retained in the CAMO and training businesses.

David Pike, Restructuring Partner at KPMG and Joint Administrator, said: “Following the administration of other Monarch entities in 2017, MAEL sought to build its customer base to replace the loss of business from the former airline. Through the insolvency of the airline however, the company inherited significant debts and claims. Every effort has been made to turnaround the business, including launching a CVA which sought to resolve these legacy debts. Unfortunately, following the CVA, a number of customers reduced or sought to terminate their relationship with MAEL, further adversely impacting the business.

“As a result, MAEL recently entered into talks with a number of potential parties with a view to selling all or parts of the business. While it is pleasing agreements with a number of operators have been secured to ensure continuity of service at the majority of MAEL’s line maintenance stations, with only partial offers forthcoming for the rest of the business, the directors have taken the difficult step to appoint administrators.

“We remain hopeful that buyers will be found for the CAMO and training businesses and encourage any interested parties to get in contact.

“We will also be making every effort to provide support to those employees who have been affected by redundancy. As following the failure of the airline, employment fairs will be held in the coming days in Luton and Birmingham, to help these employees secure new roles.”
https://www.aero-mag.com/monarch-aircra ... istration/


Make a profit by liquidating the first company ensuring that you a prime creditor having structured your "bailout" cleverly and having hung certain debts off the subsidiary company while pocketing the profit from the first little failure while selling off the bits of the second that look profitable and then walking away.

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Re: Monarch Aircraft Engineering falls into administration.

#5 Post by Ex-Ascot » Fri Jan 04, 2019 1:55 pm

Sorry posts crossed.
Cacophonix wrote:
Fri Jan 04, 2019 1:39 pm
Greybull Capital seem to have been singularly unsuited to run any aviation related business whatsoever!

Caco
Actually Caco look at their record: https://en.wikipedia.org/wiki/Greybull_Capital

They are not exactly brilliant at anything. Haven't looked into it in detail but wonder if they are asset stripping.

Note the frog connection.
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Re: Monarch Aircraft Engineering falls into administration.

#6 Post by Cacophonix » Fri Jan 04, 2019 2:09 pm

Ex-Ascot wrote:
Fri Jan 04, 2019 1:55 pm
Sorry posts crossed.
Cacophonix wrote:
Fri Jan 04, 2019 1:39 pm
Greybull Capital seem to have been singularly unsuited to run any aviation related business whatsoever!

Caco
Actually Caco look at their record: https://en.wikipedia.org/wiki/Greybull_Capital

They are not exactly brilliant at anything. Haven't looked into it in detail but wonder if they are asset stripping.

Note the frog connection.
As we both know Ex-A asset stripppers tend not to be much good at running core businesses in any sense of the word, save for ensuring residual value when carving them up and selling what is available and throwiing the rest away. Greybull seem to have done rather well out of this mess if what we read is true.

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Re: Monarch Aircraft Engineering falls into administration.

#7 Post by om15 » Fri Jan 04, 2019 2:17 pm

About five or so years ago I held a part time post holder position with a start up maintenance organisation at Birmingham, unfortunately home work hadn't been done and it wasn't adequately funded and it went under quite spectacularly, at that time MAEL had just built the new hangar at Birmingham and everyone was able to move across the tarmac and start immediately.
A couple of months ago most of them were tuped to Flybe before MAEL went under. Possibly a reprieve of sorts, but Flybe aren't doing so well and their shares dropped to 8p just before Christmas, so it's not over for them yet.
Used to go into MAEL at Luton with the company A319 on maintenance, they were excellent, on time and on cost. Hope the people soon get work elsewhere.

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Re: Monarch Aircraft Engineering falls into administration.

#8 Post by Cacophonix » Fri Jan 04, 2019 2:19 pm

Cacophonix wrote:
Fri Jan 04, 2019 2:09 pm
Ex-Ascot wrote:
Fri Jan 04, 2019 1:55 pm
Sorry posts crossed.
Cacophonix wrote:
Fri Jan 04, 2019 1:39 pm
Greybull Capital seem to have been singularly unsuited to run any aviation related business whatsoever!

Caco
Actually Caco look at their record: https://en.wikipedia.org/wiki/Greybull_Capital

They are not exactly brilliant at anything. Haven't looked into it in detail but wonder if they are asset stripping.

Note the frog connection.
As we both know Ex-A asset stripppers tend not to be much good at running core businesses in any sense of the word, save for ensuring residual value when carving them up and selling what is available and throwiing the rest away. Greybull seem to have done rather well out of this mess if what we read is true.

Greybull aren't known as a vulture fund for nothing. Beware when French vultures of dubious provenance come bearing gifts or offering money...

As was noted when they funded Monarch in the first instance.

https://www.telegraph.co.uk/finance/new ... narch.html

Caco

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