Flybe res­cued by Vir­gin At­lantic and Sto­bart con­sor­tium

Western Daily Press (Saturday) - - Business -

VIR­GIN At­lantic and Sto­bart Group have swooped on re­gional air­line Flybe in a £2.2 mil­lion deal which will see the cre­ation of a new air­line group.

The com­pa­nies, in con­junc­tion with Cyrus Cap­i­tal Part­ners, have agreed an of­fer of just 1p per share for Ex­eter-based Flybe, which put it­self up for sale in Novem­ber.

The price rep­re­sents a sig­nif­i­cant mark­down on Flybe’s Thurs­day clos- ing price of 16.38p. Shares in the air­line crashed to as lit­tle as 1.2p yes­ter­day morn­ing fol­low­ing the an­nounce­ment.

Un­der the plans, the air­line will be com­bined with Sto­bart Air in a joint ven­ture called Con­nect Air­ways.

Cyrus will own 40 per cent of the new com­pany, while Vir­gin and Sto­bart will take 30 per cent apiece.

The three com­pa­nies have com­mit­ted to make a £20 mil­lion bridge avail­able to sup­port Flybe’s cur­rent op­er­a­tions, while an ad­di­tional £80 mil­lion will be pro­vided to the com­bined group.

Flybe chief ex­ec­u­tive Chris­tine Our­mieres-Wi­dener said the com­pany had been forced to seek a buyer due to higher fuel costs, cur­rency fluc­tu­a­tions and Brexit un­cer­tainty.

“We have been af­fected by all of these fac­tors which have put pres- sure on short-term fi­nan­cial per­for­mance,” she said.

“At the same time, Flybe suf­fered from a num­ber of legacy is­sues that are be­ing ad­dressed but are still ad­versely af­fect­ing cash­flows.

“By com­bin­ing to form a larger, stronger group, we will be bet­ter placed to with­stand these pres­sures. We aim to pro­vide an even bet­ter ser­vice to our cus­tomers and se­cure the fu­ture for our peo­ple.”

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