Silverjet Announces Potential Investment of Up to $100million

Silverjet, the British exclusively business class airline, today announces an update on its working capital position and that it has entered into a memorandum of understanding (the “MOU”) with a UAE based investor (the “Investor”).

Following recent material increases in fuel prices and tightening of credit conditions in the airline industry, Silverjet’s working capital has deteriorated and its residual reserves are limited.
The MOU entered into 29th April 2008 provides that approximately US$25.0 million (£12.7 million) will initially be invested directly in Silverjet by means of debt and equity. It is anticipated that the equity element will amount to approximately US$8.0 million (£4.1million) which will be subscribed at 17 pence per share; as a result the new ordinary shares will represent approximately 28 per cent of the enlarged share capital. It is expected that a debt facility will be made available to the Company imminently.

The MOU also sets out the intent by the Investor to invest up to a further US$75 million (£38.1 million) in the ongoing development of Silverjet and to participate in the international rollout of the Silverjet brand and concept into new markets within the Middle East, the Far East and Africa.

The Directors anticipate that Silverjet will enter into binding agreements in respect of this initial tranche of the investment imminently. It is anticipated that these agreements will be conditional, inter alia, upon Board, and, in the case of the equity subscription, Civil Aviation Authority and shareholder approval pursuant, inter alia, to Rule 21 of The City Code on Takeovers and Mergers (the “Code”). Completion of these agreements will secure the future of Silverjet and its long term development. In the unlikely event that these agreements are not completed, Silverjet will have to source alternative means of funding as a matter of urgency.

Upon completing the investment, it is intended that the Investor will appoint two representatives to Silverjet’s Board of Directors.

Offer period

On 10 April 2008, Silverjet announced that it was in discussions which may or may not lead to an offer for the issued share capital of the Company.

Silverjet continues to be in an offer period, as defined in the Code, and accordingly no further information is available.

A further announcement will be made as soon as practicable and Silverjet will publish its April monthly passenger statistics on Tuesday 6th May.

Lawrence Hunt (Chief Executive of Silverjet) commented: “We are delighted to have entered into this memorandum of understanding with a long term strategic investor.

“This investment places Silverjet in a strong position to further develop our brand and proposition. It is particularly encouraging to have secured this agreement in a challenging environment for all airlines. The support of this investor demonstrates the strength of Silverjet’s exclusively business class model.

“The Board believes that the combination of Silverjet’s already strong brand and presence in the market with the support of a long term strategic investor will enable Silverjet to continue its growth and success achieved to date.”