Exeter-based airline, Flybe is being bought for £2.2m by a consortium, made up by venture capital firm Cyrus, Virgin Atlantic and the Stobart Group.
The announcement came following the recent news that the company reported losses in excess of £22m for 2018 – caused by higher fuel costs, a weak pound, and less demand for their airline.
Shareholders of Flybe will receive 1p per share, while the consortium will provide £100m investment to turn the company’s fortunes around.
Christine Ourmières-Widener, Flybe’s chief executive, commented: “The industry is suffering from higher fuel costs, currency fluctuations and significant uncertainties presented by Brexit. We have been affected by all of these factors which have put pressure on short-term financial performance.”
Following the announcement, Flybe shares closed on Thursday at just 16.38 pence. Prior to the release of the company’s figures, the company was trading at over 30 pence a share.
Concurrently with announcing the acquisition, Cyrus, Stobart Group and Virgin Atlantic have committed to make available a £20m bridge loan facility to support Flybe’s ongoing working capital and operational requirements.
In addition, following completion of the Acquisition, Cyrus, Stobart Group and Virgin Atlantic are intending to provide up to £80m of further funding to the combined group to invest in its business and support its growth, as well as a contribution of Stobart Air.
Flybe will continue to serve customers and communities across the UK and Ireland. In due course Flybe will be rebranded to Virgin Atlantic.
Shai Weiss, CEO of Virgin Atlantic said: “The Virgin Atlantic brand is built on the foundation of putting customers at the heart of everything we do, providing them with the choice they deserve and a travel experience they love. All possible because of our amazing people.
“We are pleased to have this opportunity to partner with Stobart Group and Cyrus Capital to bring Virgin Atlantic service excellence to Flybe’s customers. Together, we can provide greater connectivity to our extensive long haul network and that of our joint venture partners Delta Air Lines, at Manchester Airport and London Heathrow. In the near future, this will only increase, through our expanded joint venture partnership with Air France-KLM.”