Monarch Group feels comfortable that its current financial position will not call for the drawn down of its £25 million ($32.5 million) stand-by facility.
The group received a £75 million cash injection in November 2011 from its shareholder, the Mantagazza family.The financial package included £20 million in equity, £30 million debt as well as a £25 million stand-by facility.
Executive chairman Iain Rawlinson tells Flightglobal the group did not draw the stand-by facility in its 2012 fiscal year ended 31 October, as financial results were better than expected.
Monarch substantially reduced losses in 2012 after achieving £31.6 million in costs savings.
Following last year's cash injection, the group implemented a two-year turnaround strategy with the aim to have profitable operations in all divisions by the end of the year to October 2013. In 2012 Monarch says significant progress was made in achieving its financial targets, strengthening the leadership of the group, building awareness of the brands with a particular focus on Monarch Airlines and Cosmos, and achieving its efficiency and cost reduction goals.
Monarch says that although the macro-economic environment remains uncertain, it has made a good start to the new year with satisfactory levels of advance bookings across our consumer brands and within the engineering activity. "Brand recognition of Monarch and Cosmos is increasing at an encouraging rate, supported by improved use of technology, and consumer offerings differentiated by service levels and choice," it comments.
Group's financial director Robert Palmer says Monarch has no plans to draw the facility. "It remains undrawn and we do not expect to use it in the future," he says.