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$25 million cash injection keeps Silverjet flying

  • Story Highlights
  • Middle Eastern investor comes to the aid of Silverjet to the tune of $25 million
  • Increasing fuel costs and credit crunch had hit company's balance sheet
  • Business class airline reveals that it is also still in talks over a possible sale
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LONDON, England (CNN) -- Business class airline Silverjet has found a Middle Eastern investor to pump $25 million into the struggling group.

Airlines have been hit hard by soaring fuel costs and the worsening credit crunch.

Shares in the airline climbed 26 percent after Silverjet said it had signed a memorandum of understanding with an unnamed investor from the United Arab Emirates.

The company said up to a further $75 million had also been pledged under the deal.

Silverjet, which flies from Luton to New York and Dubai, said recent increases in fuel prices and tightening credit conditions had taken their toll on the business. Its working capital and residual reserves had been hit.

The investor will take a 28 percent stake in the group after its cash-and-equity deal.

But a full takeover of Silverjet has not been ruled out, with the group confirming that it is still in an offer period over a possible sale.

Silverjet chief executive Lawrence Hunt said it was "delighted" to sign the memorandum.

"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." E-mail to a friend

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