Talks with investors and creditors on a deal to save troubled airline Cityjet are continuing, it emerged on Tuesday.
The carrier has until mid-August to secure a rescue deal after the High Court extended an order protecting it from creditors.
Mr Justice Michael Quinn extended the court’s protection and the appointment of joint examiners Kieran Wallace and Andrew O’Leary of specialist firm, Interpath Advisory, to August 16th.
The court heard that the matter was “quite complex” and likely to take the full 100 days that the law allows examiners to come up with rescue plans for companies in difficulty.
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Mr Wallace and Mr O’Leary indicated shortly after their initial appointment in May that they were in talks with possible investors in the airline.
Neither was in court on Tuesday and did not comment after the court granted their application for an extension of time. No parties objected to their request.
It is understood that negotiations that could lead to a rescue are ongoing between the examiners, potential investors, customers including Scandinavian airline SAS, and key creditors.
Sources suggested that those talks could end within the extended time that the High Court granted.
Cityjet’s majority shareholder, Spanish company, Air Investment Valencia, controlled by businessman Carlos Bertomeu, has been tipped as a possible investor in the Irish company.
Cityjet provides aircraft and crews to SAS and Germany’s Lufthansa to fly regional routes in Europe, a practice its industry dubs “wet leasing”.
The airline sought court protection and the appointment of examiners in May, saying it had just €7.7 million to pay creditors seeking €13 million.
However, an independent report on its finances said that the business had a reasonable prospect of survival were it placed in examinership, as the rescue process is called.
Examinership allows court appointed examiners up to 100 days to devise a rescue plan for a troubled company.
The independent report, by Damian Murran of Teneo Restructuring Ireland, found net liabilities were €38.5 million at the end of February.
That mostly comprised payments due under aircraft leases, which did not fall due immediately.
His report calculated that net liabilities could increase to €66 million as a consequence of examinership, including €18.7 million due to unsecured creditors.
However, a liquidation would increase the amounts owed to €177 million, as that would trigger penalty payments to SAS and Lufthansa.
Cityjet’s problems stem from the decision of key customer, SAS, to enter Chapter 11 bankruptcy in the United States in July 2022.
That process lasted two years, limiting SAS’s ability to enter contracts with Cityjet, creating uncertainty for the Irish business.
However, SAS subsequently agreed a new four-year deal with Cityjet in October 2024.
Mr Justice Quinn provisionally listed the issue for hearing on August 14th.
