CREDITORS of CityJet will be asked today to agree to write off £6 million in a scheme of arrangement designed to save the airline company. In December an examiner was appointed to the company, which owes creditors some £8.4 million. It has accumulated trading losses of £13 million.

In a series of meeting in Dublin today with the different groups of creditors, the examiner, Mr John McStay, will ask some unsecured creditors to accept 25p in the pound and others 10p in the pound.

A small number of key unsecured creditors will be offered 25p in the pound. These include London City Airport, engine manufacturers Allied Signal, British Aerospace and Aer Rianta. They are owed £5.88 million, some 70 per cent of the company's debts of £8.4 million.

It is understood that Aer Rianta is owed about £350,000, so it will have to write off about £262,500.

The only preferential creditor is the Revenue Commissioners. While the Revenue is owed a total of about £900,000, only some of the debts qualify for preferential creditor status. The preferential debts will met at a rate of 75p in the pound but overall the Revenue is expected to have to write off about £500,000 under the rescue plan.

Creditor agreement is crucial to a plan to raise £4 million from new investors which include Malmo Aviation of Sweden, Yeoman International Holdings, Standard Life and three unnamed private investors. Malmo plans to invest £1.75 million for about a 40 per cent stake in the company while Yeoman is to invest about £0.65 million to take a 17 per cent stake. Standard Life will pay about £0.65 million for about 17 per cent of CityJet.

Three unnamed private investors are to contribute just under £1 million for about 22 per cent of the airline, bringing the total investment to £4 million. The original investors will retain about 3 per cent of the airline. About £1 million will be borrowed from the banks.

CityJet employs 165 people and has its headquarters at Dublin Airport. The airline operates mainly between Dublin and London City Airport. In December its chief executive, Mr Pat Byrne, told the High Court that most of the company's trade creditors had accepted a 75 per cent write off of their debts. Creditors to the value of £3.2 million, representing 50 per cent of the company's trade creditors, were prepared to support the company by agreeing to write off 75 per cent of their debt, he said.

In its first year of operation CityJet recorded losses of £6.6 million. In its second year the company lost £3.7 million while in its third year - the eight months to November 30th last - it lost £2.2 million.