An Irish High Court judge, Justice Michael Quinn, has said he is likely to approve a survival scheme that allows CityJet (WX, Dublin International) to successfully exit examinership. Tens of millions of euros of its debt will be written off under the plan, which is supported by most - but not all - creditors and shareholders.
The proposal put forward by the airline’s examiner, KPMG, will let the regional carrier continue as a going concern but on “a slimmed down” basis, with 146 jobs at the company being retained, the Irish Times reported.
“This is a great relief, as it means we will have a viable, surviving core business which, although much smaller than before, nonetheless provides us with the opportunity to continue as a regional airline and places us in a position to grow again in the future,” said founder and executive chairman Pat Byrne.
The airline sought the protection of the courts in April blaming the covid-19 outbreak. It said it had debts of EUR500 million euros (USD594 million) and a net deficit of liabilities over assets of EUR186 million (USD221 million).
Creditors include several lessors, the Triangle Group holding company, international banker Investec, and Revenue Commissioners, the Irish government agency responsible for customs, excise, and taxation.
The judge explained that the creditors would do better under the examiner’s scheme than if the airline was liquidated. He said he would formally approve the proposal after arrangements with creditors are completed and changes to the airline’s constitution are implemented. He then adjourned the case until mid-August.
However, Revenue Commissioners said on July 24 that it was seeking clarification of “important” issues before deciding its position on the survival scheme. KPMG counsel James Doherty revealed at the High Court on that date that it was not clear if the government agency would support the plan, adding that when it was put to CityJet's creditors Revenue Commissioners had voted against it.
