The High Court has approved an examinership rescue plan for CityJet DAC after rejecting objections from its sole shareholder, Strategic Alliance of Regional Airlines Limited, and associated creditors.
Mr Justice Michael Quinn found that the proposed restructuring satisfied the statutory test for creditors and gave CityJet a reasonable prospect of surviving as a going concern.
Under the plan, SARA's existing shareholding will be cancelled. Danish company CityJet Holding ApS will invest €750,000 for a 92% stake and provide a €2.45 million working-capital facility. EIC Aircraft Leasing Limited will take the remaining 8% stake.
Unsecured and contingent unsecured creditors are to receive 2% of their claims. SARA argued that creditors would recover more in a liquidation and that CityJet remained unlikely to survive.
The court rejected both arguments. After considering competing valuations, Quinn J accepted an estimate valuing CityJet's aircraft-parts inventory at €545,646. Even using other figures advanced by SARA, he calculated that unsecured creditors would receive about 1.74% in a winding up, below the 2% offered under the scheme.
On future viability, the judge relied on a wider package of support rather than the equity investment alone. This included a €2.45 million working-capital facility, other one-off supports totalling €11.8 million, projected cost savings and operational support of about €30 million over three years, and an expanded contract with Scandinavian Airlines System.
SAS agreed to increase the aircraft covered by its contract from 12 to 15, a commitment described as worth about €80 million. The court also accepted evidence that replacement maintenance arrangements and staff restructuring would reduce costs.
CityJet had 122 employees when the proceedings began. The court was told that 79 of a reduced Dublin workforce of 109 were expected to be retained, with up to 17 additional jobs created in Denmark.
The court confirmed the proposals, with the effective date and any ancillary orders left for further hearing.