SkyEurope Holding

euro adhoc: SkyEurope Holding
Capital measures
SkyEurope announces significant financing led by York Global Finance II S.à r.l. - EUR 56.3 million of capital to be raised: EUR 38.8 million from York and EUR 17.5 million via a public markets rights o

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28.08.2006

NOT FOR DISTRIBUTION IN OR INTO THE UNITED STATES

SkyEurope Holding AG ("SkyEurope" or the "Company") has signed an agreement with York Global Finance II S.à r.l. ("York") under which York will invest EUR 38.8 million of fresh capital into SkyEurope as part of a comprehensive EUR 56.3 million equity and equity-linked financing package.

York Global Finance II S.à r.l. is an affiliate of York Capital Management, an international private investment fund group with over EUR 6 billion of assets under management.

The transaction will include several elements:

- Existing and new shareholders will have the opportunity to purchase 10 million new shares of SkyEurope via a rights issue, at a fixed price of EUR 1.75 per share, pursuant to the approvals received from shareholders at the General Meeting held on 20 June 2006.

- York will purchase approximately 9 million new shares also at a fixed price of EUR 1.75 per share.  York will own approximately 23% of SkyEurope’s pro forma shares outstanding after the issuance of such shares and the rights offering are completed.

- York will purchase approximately EUR 6.7 million of bonds mandatorily convertible into an additional approximately 3.8 million new shares of SkyEurope upon receipt of various regulatory approvals. Receipt of such approvals and conversion are expected to occur within 6 months, during which time the bonds will not bear interest.  If such conversion takes place, York’s pro forma equity stake in SkyEurope will rise to 29.9%.

- York will purchase a further EUR 17 million nominal amount of non-mandatorily convertible bonds, with net proceeds to the Company of EUR 16.4 million.

Three current members of the Supervisory Board of SkyEurope have resigned and the Supervisory Board has proposed three new members to be elected.

The issuance of new shares and convertible bonds to York on a non-preemptive basis as well as the appointment of the new Supervisory Board members are subject to shareholder approvals, which will be sought at an Extraordinary General Meeting of Shareholders to be held on Wednesday, 20 September 2006.  The rights issue, which remains subject to approval by the Austrian Financial Markets Authority and is a condition precedent to York’s investment, is expected to be launched in the coming weeks and to close before the end of September.

Christian Mandl, Chief Executive Officer of SkyEurope, commented: "We are delighted that an investor with York’s reputation, resources and experience has chosen to invest in our Company.  We look forward to working closely with York to enhance our position as the leading low cost carrier in Central & Eastern Europe and to continue the high quality of service we provide to our valued customers.  SkyEurope management is committed to focus on profitability and to deliver significant shareholder value."

Christophe Aurand, Chief Executive Officer of York Capital Management UK Advisors Limited, commented: "York believes SkyEurope is strategically positioned in highly attractive emerging European markets which offer significant growth opportunities not available in most parts of the world.  Additionally, SkyEurope’s low cost and entrepreneurial business model enables a product and service offering superior to its competitors.  We are excited to work with the management and employees of SkyEurope and to contribute to the strategic development and profitable growth of the Company."

UBS Investment Bank and CA IB acted as financial advisers to SkyEurope in connection with the investment by York and will act as lead managers of the rights issue.  Linklaters together with Weber Maxl & Partners acted as legal advisors to SkyEurope.  Allen & Overy LLP together with Wolf Theiss advised York on the transaction.

About SkyEurope:  SkyEurope Holding AG is the holding company of SkyEurope Airlines, a.s.  The company has been listed on the Vienna and Warsaw stock exchanges (VSE: SKY; WSE: SKY, ISIN AT0000497003) since 27 September 2005.  SkyEurope was founded on 6 September 2001 by Christian Mandl and Alain Skowronek and is the largest low-cost, low-fare airline in Central and Eastern Europe with bases in Bratislava, Budapest, Warsaw, Krakow and Prague.  SkyEurope operates a route network of 73 routes to 37 destinations in 19 European countries and has a fleet consisting of 16 aircraft.

About York Global Finance II S.à r.l: York Global Finance II S.à r.l is an affiliate of York Capital Management.  York Capital Management is an international private investment fund group with over EUR 6 billion of assets under management.  York Capital was founded in 1991 by James G. Dinan and has offices in New York, London and Singapore. York specializes in high quality, value oriented public and private equity investments as well as credit securities.

THIS IS NOT AN OFFER TO SELL NOR A SOLICITATION TO BUY ANY SECURITIES OF SKYEUROPE HOLDING AG.  IF AND BEFORE AN OFFER IS MADE, A PROSPECTUS PREPARED IN ACCORDANCE WITH THE AUSTRIAN CAPITAL MARKET ACT AND APPROVED BY THE AUSTRIAN FINANCIAL MARKETS AUTHORITY WILL BE PUBLISHED.  ANY SECURITIES ORDERS RECEIVED PRIOR TO THE COMMENCEMENT OF THE OFFER PERIOD PROVIDED FOR IN SUCH PROSPECTUS WILL BE REJECTED.

NOT FOR DISTRIBUTION IN OR INTO THE UNITED STATES. THE SHARES AND CONVERTIBLE BONDS REFERRED TO HEREIN HAVE NOT BEEN AND WILL NOT BE REGISTERED IN THE UNITED STATES AND MAY NOT BE OFFERED OR SOLD IN OR INTO THE UNITED STATES.

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ots Originaltext: SkyEurope Holding
Im Internet recherchierbar: http://www.presseportal.de

Further inquiry note:
SkyEurope Holding AG
Mag. Erhard Schmidt, CFO
Tel.:+421 2 4850 1180
mailto:investor.relations@skyeurope.com
http://www.skyeurope.com

Branche: Air Transport
ISIN:      AT0000497003
WKN:        A0F5WU
Index:    WBI
Börsen:  Wiener Börse AG / official market



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