Headline : SkyEurope continues sale talks with financial investors, current climate makes it difficult, CEO says; York deal almost ruled out, source says
Proprietary Intelligence
Main body : SkyEurope, the listed Slovak airline, is continuing to talk to around five potential investors, chief executive Jason Bitter said.
In an interview with this news service, Bitter said talks were ongoing with potential buyers, all of whom were financial investors, but nothing was at an advanced stage. Bitter confirmed an earlier report that a joint venture of Sapo International and Longstock Financial Group was interested in acquiring SkyEurope, and said this was one of the interested parties to which it is talking. It was not expected that a new owner would be agreed in the near future and it was not too late for any new parties to begin talks, he said.
A company source said that it was very unlikely that York would take over SkyEurope because resistance among some shareholders made that scenario impossible. According to earlier reports, York, which currently owns a 30% stake, was looking to up its stake to 100%.
When asked if York Capital's offer for a full takeover was still on the table and if there were other serious potential buyers, a source at York would only say that these are difficult times but there might be something about to pan out for SkyEurope - "a light at the end of the tunnel". The source said he was not at liberty to say more right now but might be able to do so shortly.
Bitter said that it was a difficult time to sell an airline due to the general climate and said SkyEurope was proceeding on the basis of not attracting an investor, although he added that to do so was tough. Rothschild is still advising the airline on the search for an investor. Bitter dismissed an earlier unsourced press report in Die Presse which suggested that some sources believed Rothschild had not tried hard enough to find an investor. Bitter said Rothschild had been working very hard to find a buyer.
The airline would not now call an EGM to discuss interest from potential buyers, as had been previously planned, Bitter said. An AGM is due to be held before the end of March where the situation would be discussed, he added.
Bitter said it was likely that the board would decide to extend a 15 January deadline for a EUR 15m loan from York to be repaid. Separately, a large part of the EUR 14m in funds that had been frozen by the airline’s credit card company had been released in the past few days which was very positive news, he said.
Many of SkyEurope’s flights were seriously disrupted several days ago after GECAS terminated the leases for six aircraft leased by SkyEurope Airlines a.s. as of 8 January 2009 and the aircraft were returned to GECAS. Bitter said the airline was operating all flights and business was “close to normal” but would not be totally back to normal in terms of operating an ideal fleet for some time to come. The airline currently owns five airplanes and is leasing further aircraft on both a short-term and long-term basis. It still intends to take three aircraft from Boeing, he said.
Bitter said the airline was operating at an average seat load factor of 73% in December, which was 5% up on December 2007. It had no plans to further reduce its flights, he said.
source: mergermarket