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A.smithy, would you file for bankruptcy if you had £70m in the bank? If the BOD recognised that it was downhill all the way then perhaps the only option was to sell. However, not at any price because liquidation would have resulted in a much better outcome for the shareholders who'd receive close to the 40p which, ironically, was the offer made back in March. Cash and assets don't just disappear, they either spirited away or paid back and I suspect the former and so does Hosking.
What's been happening with the share price since the 1p offer announcement has nothing to do the main issue being discussed on this board. There's no point even discussing it.
I'll keep repeating until I'm blue in the face, Flybe had an NAV of £118m back in Sept 2018. SoulDoubt, can you tell me where it's gone? because I'm b******d if I know!
Section 303 Companies Act 1985
* There may be a number of mechanisms in the service agreement, articles or shareholders agreement for removing a director, for example, the articles may say that a director may only be removed with a 95% vote of shareholders. No matter what other mechanisms there are in these agreements, section 303 of the Companies Act 1985 always allows a director to be removed by an ordinary resolution of the shareholders. An ordinary resolution is a simple majority of the votes cast.
* Section 303 contains a special procedure. A shareholder who wants to propose the ordinary resolution to remove the director must give the company 28 clear days notice of the proposal. The 28 day rule means that if a meeting of shareholders has been convened and is less than 28 days away, the removal resolution cannot be tabled at that meeting and a separate shareholders meeting will be necessary at a later date.
* If there is no shareholders meeting currently convened, on receiving the shareholders notice, the directors are obliged to call a shareholders meeting in the usual manner. A copy of the notice of the shareholders meeting must be sent to the director in question. The director has the right to attend the shareholders meeting and he can make representations at the meeting if he chooses. The director can also make written representations to the company before the meeting and ask the company to send out those representations to each shareholder.
* The Section 303 removal procedure, although time consuming, is the ultimate way in which shareholders can control their company. This is why the procedure applies no matter what other agreement has been made. There is one variation to this right. This comes in the form of weighted voting rights.
An I'll informed commentary IMO. Unfortunately, Mr Leach hasn't done his homework and is speculating an outcome based on the market price movements since the announcement was made. A complete load of rubbish and can be dismissed out of hand IMO.
You're not looking hard enough then!!
Are you being paid by the BOD?
The only thing you said that has any element of truth is that Flybe would probably have to stop trading IMHO. It's only because they issued a profits warning that triggered the credit card companies to increase their collateral requirements. Do you know what collateral means? They're not giving the money away, there simply prevented from spending it.
As an investor, when it comes to finding a buyer, I'm not bothered about the market price, I'm only interested in the balance sheet. Either they're lying or the NAV as at the end of Sept 2018 was £118m with a £70m cash balance. They do have debts but the asset valuation on their aircraft more than covers them. Even the shower running Flybe couldn't loose that much money in only a few weeks. I fly regularly with Flybe and the flights are usually full.
Why do so many bloggers want to run Flybe down? Jack Walker will be turning in his grave. Yes, the BOD are a right shower but this is a profitable business if run properly. Other companies seem to manage with much smaller market share.
Ironic, your summary is your opinion but clearly not based on evidence, IMO. The cash Flybe needed was not to shore up a loss making business, it was to fulfil the credit card companies demands for more collateral. The money still belongs to Flybe, they just can't spend it. The accounts show Flybe made profits in H1 and their asset value was £118m with £70m in cash. They may have been forecasting a loss in the next half year but that loss was relatively small compared to their asset value. The real problem, as so many have pointed out, is cash flow related.
There are no dates in their Financial Calendar, not surprised by that. The reports usually come out in Nov and June so a long wait for the next one.
I've just read through the accounts again and would urge any doubters out there to take look for themselves before writing Flybe off. Perhaps if we can oust Laffin boy, and there were no offers forthcoming, liquidation could be the best outcome for shareholders. That said, IMO, Flybe is profitable and so long as the credit card companies aren't allowed to stifle the business, it could be best for Flybe to continue as it was.
One fly in the ointment, that I don't think has been discussed here. Flybe committed themselves into buying four new aircraft. At the same time, they've reduced capacity by axing some of the less profitable routes. Perhaps they no longer need the new aircraft and are looking to cancel their order. It looks like this could cost them £15m to do so. Perhaps this was the final straw for the BOD. Worth further investigation I think.
https://www.hl.co.uk/shares/stock-market-news/aim-and-small-cap-news/small-cap-news/flybe-board-puts-support-behind-chair-in-hosking-dispute
According to HL, Flybe shares are worth £12.96 each. In another post on their site, the offer was for 10p a share. I think they need a new editor!
Like you, I read these boards to discuss Flybe and it's fun speculating but where on earth do half these 'facts' come from? Hasn't anyone read the latest accounts? Okay, they could be a pack of lies but they're the only concrete statement we have. They tell us the asset value of Flybe and its plans for the following quarter. They show a profit being made in H1, small admittedly, but not a loss. We know the fuel price has been hedged, we know that the credit card companies demanded more collateral that started this fiasco and have since relented (a bit) and aside from a few incidental pieces of news, that's it. We're told that the aviation business is difficult to make a profit in but go and have a look at Stobarts accounts they seem to manage okay. Don't believe the naysayers, 40p would be a good price for picking up a complete business, making profits with annual revenue circa £800m.
You don't have a clue what you're talking about. To be honest, none of us do and I'm happy to include myself in on that. The thing is, you've missed the point, the reason we're all waiting is because nobody has a clue what's going on and we're being told nothing by the BOD as to why. What we do know is that back in March it was valued at 40ppp, in September it was given an NAV of £118m in their accounts and making profits. It did give out a profits warning but how could it lose £116m in three months?
It's understood that Airlines do not 'Own' slots. A slot is an allocation to an airline which, I imagine, could be revoked at any time. However, slots are traded. Virgin recently (2015) raised an internal transaction for over £200m using slots as collateral.
This link shows Flybe selling slots to Virgin and Qantas back in 2004. https://en.wikipedia.org/wiki/Landing_slot
Airlines do not usually attribute any value to slots in their accounts, I suppose because they don't 'own' them.
So, a lot has been said about slots but in my mind, the financial situation regarding Flybe's slots remains as clear as mud!
Yes I do. My sister worked there for many years. This fiasco would never be allowed to happen in Guernsey!
Yes, There's a very good reason. It started in Guernsey!!!!!!!!!!!!!!!!!!!!!!!!!!!!
I wish I had a £1 for each time I've heard something like this. I live and work in Guernsey, I probably pay more tax here than I would if I lived in the UK. My petrol is £1.35 a litre and I have no NHS or free dental care. There's no VAT but everything has to be imported by ship or plane and the costs are passed on so whatever I buy it costs more than it would do in the UK, despite VAT. Guernsey is a very tightly regulated place to do business and money laundering is far less likely to happen here than in London. We're not a tax haven!!!!!!!!!!!!!!!!!!!
Shareholders representing at least 5% of the company's voting rights can require the board to call a general meeting of the shareholders. If this was arranged quickly, the resolutions could be to stop the sale, re-open the bidding process, and sack the BOD.
We know that the shareholders have not been given a vote on the sale but what if their was a vote from the shareholders to stop the sale. Would the BOD not have to take notice of that?
Many things about this sale puzzle me but one transaction in particular is beyond all reason. Flybe sell all it's assets to Stobart in return for a £10m loan which immediately becomes part of the assets they've just bought! Is it possible we've just witnessed a company disappearing up its own backside!
It's just a bit of fun but if somebody was really trying to accumulate 75% without anyone cottoning on, that would be very difficult and probably illegal. Since illegality is being suspected here anyway, one more crime may not matter. Anyway, perhaps the buyer is in cahoots with a few other existing holders, perhaps he's asking his mates to buy shares on his behalf? Does anyone know how quickly, after a trade has been executed, that form 8.3/8.5 has to be published?
The problem all along has been the lack of meaningful information and we're all just guessing.
Perhaps fantasy but then again it would make quite a good film script:
How to buy a company on the cheap. Get the BOD on your side, promise them great bonuses and jobs with high salaries, convince them you have the cash needed to run their business and suggest how they need to complete the deal without shareholder approval. Once that's done, make an offer of 1p per share and watch the market go into panic. You know there's a good chance the regulator will stop you and the shareholders will most likely raise a challenge but whilst all this confusion is going on start buying, buy as much as you can until you finally have 75%. You'll pay much less than you would have done now that you've got the shareholders in a panic and scrambling to recover or minimise their losses. Once you've got your 75%, you can now buy the remaining 25% for the highest price you've paid over the last 12 months and hey presto, the company is yours. Okay, just a bit of fun?