Flybe seeks to reassure shareholders as Virgin Atlantic takeover turns bumpy
PUBLISHED: 08:53 24 January 2019 | UPDATED: 13:46 24 January 2019
Norwich Airport airline Flybe has assured shareholders that its takeover by a number of larger airlines, including Virgin Atlantic, is on track.
To settle unrest in the shareholders, Flybe confirmed that it had already received the first £10m in funding as part of the buyout.
Flybe currently flies out of Norwich to destinations including Exeter, Alicante and Malaga, as well as offering flights to John O’Groats and Aberdeen through a partnership with Eastern Airways.
MORE: Norwich Airport airline Flybe puts itself up for sale
The group - which is being bought by a consortium of buyers comprising of Virgin Atlantic, Stobart Group and investment firm Cyrus Capital Partners - last week overhauled its takeover after the carrier failed crucial financing terms.
Flybe said it had failed to meet the conditions for receiving a promised £20 million bridge loan under the original takeover deal as credit card banks clamped down amid fears over the airline’s financial security.
But the consortium of bidders restructured its takeover in a bid to speed up the deal and offer immediate financial support to Flybe, with a revised loan of up to £20m.
MORE: Flybe buyers including Virgin Atlantic forced to revise payment for airline up to £2.8m The buyers will instead pay £2.8 million to take control of the main trading company Flybe and the online arm Flybe.com in a deal set to complete by February 22, while later completing the purchase of the wider holding company for 1p a share.
However, its biggest investor - London-based asset manager Hosking Partners - is reportedly considering legal action over the cut-price takeover, accusing the company’s directors of breaching their obligations to investors.
Under the takeover plans, the airline will be combined with Stobart Air in a joint venture called Connect Airways.