UK-based Monarch Aircraft Engineering (MAEL) has been put up for sale by private equity group owners Greybull Capital and its board of directors, the company confirmed on Friday (Dec. 14).
MAEL says talks have begun with several potential parties from the UK and abroad with a view to selling all or parts of the business. So far, interest has been registered by potential buyers in the entire business, as well as in individual units such as its line maintenance division, CAMO services and base maintenance. No sale valuation was disclosed.
The company says its day-to-day operations won’t be affected during the sale process. Projects such as a new £2 million ($2.5 million) Northampton-based component maintenance center, which is around 80% complete, have slowed because of the sale process but will remain ongoing.
The announcement comes just two months after Greybull Capital became the group’s majority shareholder of the maintenance and engineering business, which continued operating as a standalone entity after the collapse of its airline parent in October 2017.
Last month, MAEL entered into a company voluntary arrangement (CVA) in a move to shed historic debt it inherited from its defunct airline affiliate estimated at more than £100 million. The MRO confirmed that the arrangement presented the business with “a number of challenges which need to be resolved.”
Chris Dare, managing director of MAEL, says that while the CVA successfully helped manage the inherited debt, subsequent pressures with customers led to directors and shareholders opting to put the business up for sale.
“The decision was taken post-CVA and has been driven by some of the customers’ action during that process,” he says. “There is sometimes a bit of a lack of understanding as to what a CVA is in the aviation industry as they are not as common as in other sectors such as retail,” Dare explains. One of MAEL's former customer contracts not related to this was its agreement with Flybe, which MAEL terminated on Nov. 27 following a contractual dispute.
Dare says any change of ownership would be a trade sale to another MRO business and not another private equity company. MAEL isn’t currently speaking with any OEMs looking to bolster their aftermarket services at present through MRO acquisitions, but Dare says this can’t be ruled out at some point in future.