Rescue deal agreed for Exeter-based airline Flybe

Flybe shareholders urged to accept Virgin Atlantic's £2.2m takeover offer

Struggling regional carrier Flybe plunged 77% after it agreed to be taken over for a mere £2.2m by a joint venture comprising Stobart Group, Virgin Atlantic and funds managed by Cyrus Capital Partners.

Ports of Jersey has called the sale of Flybe "positive news" but says it is yet to have any formal discussion with the airlines and businesses involved.

Flybe said it expected "pressure" on its cash flow to continue, and added the offer represented "the most realistic means of securing Flybe's future".

The companies, in conjunction with Cyrus Capital Partners, have agreed an offer of just a penny a share - some £2.2 million - for Flybe, which put itself up for sale late past year.

Flights now booked with the airline will continue as the name of Flybe slowly disappears and will be replaced by aircraft carrying the Connect Airways logo.

This will be followed by a further £80 investment in future months.

The combined group will also operate independently to Virgin Atlantic under one management team, and will be 40 per cent owned by Cyrus Capital Partners, with Stobart Aviation holding 30 per cent, and 30 per cent by Virgin Atlantic Limited.

Virgin Atlantic and Flybe already have a codeshare agreement in place, meaning that passengers are able to transfer between the two airlines on selected flights.

More news: Rockets Can't Overcome Second Half Drought In Loss To Bucks

Regional carrier Flybe has been saved from bankruptcy by a consortium of buyers including Virgin Atlantic and Stobart Group.

"We have been affected by all of these factors which have put pressure on short-term financial performance", she said.

Connect has committed to make available a £20 million bridge loan facility to support Flybe's ongoing working capital and operational requirements.

Flybe's October profit warning wiped £20m off its market capitalisation, while its 48p share price in March 2018 had shedded value to hit just 11p in November, before interest from larger airlines helped push it up to 16p.

Virgin and its new partners form a new joint venture, Connect Airways.

The statement said the new airline would "continue to serve customers and communities across the United Kingdom and Ireland", but stopped short of making any specific pledges about whether all the routes FlyBe now services would continue to exist in the new world.

For Stobart Group, which had already run the slide rule over Flybe a year ago, the deal gives it scale to compete in the European short-haul market and to grow passenger numbers at Southend airport.

Currently Flybe operates a fleet of 76 aircraft and is the most punctual UK-based airline in a report on "Best and Worst Airlines" issued by "Which" a year ago.

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