US Court Approves Silver Airways DIP Funding and Sale Auction

The U.S. Bankruptcy Court has approved Silver Airways’ immediate access to USD5.5 million in debtor-in-possession (DIP) financing from KIA II LLC, an affiliate of Wexford Capital, and scheduled an auction for the sale of the regional airline on May 28, 2025.

Judge Peter D. Russin confirmed the funding on May 15, stating the airline urgently needed the cash to pay employees, maintain vendor relationships, and sustain operations during its Chapter 11 restructuring. The court found no better funding offer currently available.

This ruling follows a tentative approval granted in April. The DIP funding is intended to preserve the value of the airline ahead of a proposed sale. Judge Russin warned that without the capital, Silver Airways would face “serious and irreparable harm.”

KIA II LLC has submitted a stalking horse bid of USD5.775 million through a credit bid, meaning the post-petition debt would be cancelled in exchange for acquiring the airline. Other bidders have until May 25 to register for the auction, with a final sale hearing scheduled for June 4.

The auction includes Silver Airways and its subsidiary Seaborne Airlines, though KIA II’s offer applies only to the parent carrier. Talks to sell Seaborne for USD3.75 million collapsed due to a missing deposit.

Silver Airways reported over USD500 million in liabilities at filing. The court acknowledged concerns about low sale valuations but said the DIP-backed sale was the best recovery path. Lessors such as Azorra and Nordic Aviation Capital supported the plan despite expecting partial repayment.

A hearing on a U.S. Trustee petition to dismiss the case is set for June 24.

Related News: https://airguide.info/category/air-travel-business/airline-finance/

Sources: AirGuide Business airguide.info, bing.com, ch-aviation.com