Struggling regional airline Flybe was given yet another lifeline on Tuesday, as white knights Stobart Group and Virgin Atlantic outlined a revised rescue deal.
The buying consortium, which also includes investor Cyrus Capital Partners and is called Connect Airways, will pay £2.8 million for the main trading company Flybe and its digital arm.
The funds will be on top of the 1p per share offer, which values the firm at £2.2 million, announced last Friday.
The acquisition of the trading company follows Flybe’s announcement today it has failed to strike a deal with its banks which would have released a £20 million bridge loan from Connect Airways. Shares in Flybe nearly halved to 2.1p today.
A new deal was revealed today that allows the consortium to release £10 million of that immediately “to support the business”.
Flybe, led by Christine Ourmières-Widener, added: “In addition, a number of improved agreements with banks have also been reached today to improve liquidity.”
David Madden, analyst at CMC Markets, said: “The sale of assets and the bridge loan give the company some much-needed breathing space.”
The update comes a day after Andrew Tinkler, a Stobart shareholder involved in a legal dispute with the logistics firm, said he had acquired a stake in Flybe. He said yesterday: “I have huge faith in the potential of this business [Flybe].”
The carrier has struggled with higher fuel costs and currency headwinds, as well as softer customer demand.
