Get 2p while you can..............15 Jan 2019 12:00
Flybe has accelerated its planned sale to a Virgin Atlantic-led consortium by finding a way to do the deal without the approval of shareholders.
The embattled regional airline will sell its two main operating subsidiaries – the airline and the engineering operations – to the Connect consortium before shareholders get the chance to vote on a formal takeover offer for the parent company.
Flybe, which is quoted on the London Stock Exchange, announced the takeover by Connect last week.
The consortium comprises Virgin Atlantic, the Stobart transport group, and a US hedge fund Cyrus Capital Partners. The consortium said it would pay £2.2m – 1p per share. It also said it would advance £20m to Flybe as a bridging loan to keep it flying – provided the airline could meet certain conditions, including the return of security deposits that had been demanded by credit card companies.
The airline admitted this morning it had not met all the conditions for the loan. Now Connect will advance £10m immediately in return for Flybe agreeing to sell the two subsidiaries – which contain nearly all the airline’s assets. The deal can take place in two days’ time when the terms of Flybe’s listing on the London Stock Exchange are changed. It will switch from a premium to a standard listing, meaning less shareholder approvals are required for a big transaction.
The speed of the move underlines the extreme pressure on the airline’s finances. The company said: “The board of Flybe believes that obtaining this … provides the security that the business needs to continue to trade successfully. This preserves the interests of its stakeholders, customers, employees, partners and pension members.”