PwC consultants help Monarch with restructuring plan

22 August 2014

British travel group Monarch finds itself in need of fresh capital and is considering selling a stake to outside investors. Consulting firm PwC has been hired to draft and lead a rescue plan in case the search for investors falls through.

Monarch is a British travel group* that is based at Luton Airport in London, United Kingdom, and controlled by the Swiss billionaire family Mantegazza. After struggling during the recession and coming back in the black, worsening conditions and fierce competition in the travel sector have caused Monarch to be in the need for new capital. It is estimated that Monarch needs as much as £60 million to restructure its holding company and to stay ‘alive’. For the first time, Monarch is considering selling a stake to outside investors. This decision follows Monarch's third bail-out in five years. One of the possible investors is Jon Moulton, the venture capitalist, which focuses on struggling companies. Other candidates are Towerbrook, Indigo Capital and HIG Europe.

Monarch and PWC - Plane

In addition to finding investors, Monarch’s new Chairman Roy McNulty and Chief Executive Andrew Swaffield are subjecting the entire company to a strategic review. “The review covers all areas of the business from operations to ownership and financing, with the objective of determining the optimum structure to realise the significant opportunity to build on the respected Monarch brand and distinctive offer to its customers in the budget airline market,” states Monarch. The company has also drafted a proposal to streamline its operations and plans to shrink the fleet and repel unprofitable routes, such as long-haul flights.

Monarch is also considering other options. It has hired a team of restructuring specialists from consulting firm PwC to draft a contingency plan and lead the implementation of that plan in case the search for possible investors falls through.

* The group owns the tour operator Cosmos and the travel websites Somewhere2stay and Avro.