Monarch Airlines failure: Greybull admits to limiting losses but hits back at claims it profited from carrier's failure

 
Oliver Gill
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Greybull Capital said it had injected £250m into Monarch during its three years of ownership (Source: Getty)

The owner of Monarch Airlines today hit back at suggestions it has profited from Britain's biggest airline failure but admitted it had sought to limit its losses.

Greybull Capital, which bought Monarch for a £1 in 2014, said it had "not taken out loan repayments, dividends or interest in the last three years".

"Monarch’s demise cannot be reasonably attributed to the actions of Greybull," the turnaround fund said in a statement.

Greybull reiterated it had injected more than £250m of fresh capital into the stricken airline.

Recent reports have suggested the fund's losses were dramatically less after agreeing to a complex deal via an offshore trust with aircraft maker Boeing. Yesterday, the Financial Times reported Greybull's losses could be as little as £80m.

Greybull said:

Like any prudent investor, we seek to limit our losses.

If investors are not permitted to do that, then far fewer troubled businesses would have a chance to be rescued.

Read more: MPs hit out at £1 Monarch deal that risked pensions and rewarded mega-rich

Pensions

Yesterday, work and pensions select committee chair Frank Field hit out at Greybull's purchase of Monarch that ditched its retirement scheme into the UK's pension lifeboat. He queried the arrangement whereby Greybull contributed £30m into the scheme which had a £158m deficit. Monarch also issued 10 per cent of its equity to the pension fund and a £7.5m loan note.

The turnaround fund said it had agreed its original investment and associated pension fund restructure with both the Pension Protection Fund and the Civil Aviation Authority in 2014.

Greybull said:

Our rescue of Monarch in 2014 provided over 2,700 people with employment over the last 3 years and generated over £250m of receipts for HM Revenue and Customs. Whilst we regret Monarch has not been successful for longer, we believe this outcome is far preferable to the business having failed in 2014.

We believe that we have acted responsibly and with integrity throughout this difficult journey and we will continue to do so. By way of current example, we are encouraged that the support and services being provided to employees, funded at our cost, is starting to help them find alternative employment.

Turnarounds are not always successful. They are high risk. However, a failed attempt to turnaround a company must not be confused with irresponsible behaviour.

Read more: MPs mull probe into Monarch collapse as union calls for investigation

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