Monarch Aircraft Engineering has acknowledged that its shareholder structure is “unsustainable in the medium and longer term” and that a review is under way.
But the UK maintenance provider stresses that it is “not [the] subject of a winding up order or any other form of administration or insolvency process”.
This follows a Sky News report that UK tax authority Her Majesty's Revenue & Customs (HMRC) has made preparations to issue a winding up petition in relation to tax claims against MAEL’s former parent Monarch Group. HMRC declines to comment on the report.
A year ago, Monarch Group went into administration, with MAEL emerging as the group’s only surviving division.
The unit, employing around 800 staff members, was established as a standalone MRO provider, while its ownership remained under Monarch Group administrator KPMG’s control. Greybull Capital was shareholder of the group until its collapse.
KPMG has just applied to extend by two years the period of administration until the beginning of October 2020.
MAEL says it made “good progress in agreeing the terms on which the ownership structure and legacy issues will be resolved”, and that the company is “confident that the process will be finalised by the end of [October]”.
The MRO provider’s balance sheet will be “strengthened” as a result of the ownership change, MAEL adds.
Chief executive Chris Dare states that the restructure represents “the final phase in the journey to go from being a division of Monarch Group to a successful, stand-alone entity.”
He says: “We have enjoyed strong support from our key stakeholders which has been so important as we complete our journey.”
Noting that MAEL lost more than half of its revenue when Monarch Airlines ceased operations, Dare says he is “proud” that the MRO company has meanwhile stabilised its operations and has “significantly” grown its business.
MAEL has aircraft maintenance facilities in Luton and Birmingham, and earlier this year opened a new component repair shop in Northampton.