Nats on edge as Serco loses interest

NATIONAL Air Traffic Services remains in a precarious financial position following a decision by management services group Serco to walk away from talks about an equity injection worth up to £50m.

Serco confirmed it had abandoned the negotiations but declined to say why. Nats had hoped a deal with Serco would convince the Government, which still owns 49% of the service, to contribute a similar amount.

It is believed Serco wanted to secure management contracts from Nats and be heavily involved in the day-to-day running of the group. However, Nats made it clear that it was looking for a silent equity investor. A Nats spokesman said the group was still negotiating with several potential investors and hoped to strike a deal by the end of summer.

The opposition to Nats taking in an active investor is believed to come from The Airline Group, a consortium of carriers including British Airways and Virgin Atlantic. The spokesman said the negotiations had involved the consortium, which owns 46% of Nats, although he declined to reveal their grounds for opposing active partners.

Serco had hoped to be the Government's partner of choice when it privatised Nats last year and saw its current financial predicament as a fresh opportunity to become involved.