Flybe takeover deal overhauled

The consortium involving Virgin Atlantic that swooped last week to buy regional carrier Flybe has overhauled its offer.

Flybe said it had failed to meet the conditions for receiving a promised £20 million bridge loan under the takeover deal, unveiled on Friday.

But the consortium of bidders – which also includes Stobart Group and investment firm Cyrus Capital Partners – has overhauled its takeover in a bid to speed up the deal and offer immediate financial support to the embattled airline.

It will now pay £2.8m to take control of the main trading company Flybe and the online arm Flybe.com in a deal set to complete by 22 February, while later completing the purchase of the wider holding company.

The buyers have also offered a revised bridge loan of up to £20m, with £10m released yesterday to “support the business”.

However, shareholders will still receive just a penny per share for the holding company of Flybe, as agreed in the original deal.

The cut-price takeover deal announced at the end of last week will see the creation of a new joint venture called Connect Airways.

Under the plans, the airline will be combined with Stobart Air and operate under the Virgin Atlantic brand, meaning the likely return of the Virgin brand to Scottish routes.

Flybe also announced on Friday that it had agreed with Vueling Airlines to sell its slots at London Gatwick Airport for £4.5m. Vueling is a subsidiary of British Airways owner IAG.

Flybe put itself up for sale in November after warning over profits in 2018. The carrier is battling challenging conditions in the industry and has suffered with falling demand and a hit from rising fuel costs and the weak pound.

Flybe has 78 planes operating from smaller airports including London City, Southampton and Norwich, and flies to destinations across the UK and Europe.