Connect Airways, the joint venture company made up of Virgin Atlantic, Stobart Group and Cyrus Capital, has updated its offer for regional carrier flybe.
The consortium originally announced a recommended cash offer on 11 January for all the issued and to be issued share capital of Flybe Group.
Connect Airways also announced it would make a £20 million bridge loan facility available, subject to a number of conditions, to support Flybe’s ongoing operations, with plans to provide up to £80 million of further funding to the combined group after the acquisition to invest in its business and support growth.
However Flybe were unable to meet the conditions to access the funds. The airline said in an update: “Despite significant efforts it has not been possible to satisfy these conditions and so Flybe has been unable to draw any funds under the Bridge Facility Agreement.”
As a result, the Board of Flybe and Connect Airways have reached an agreement for Connect Airways to purchase the Group’s main trading company, Flybe Limited (including Flybe Aviation Services Limited) and the digital company Flybe.com Limited for £2.8 million, subject to a limited number of conditions.
The agreement also covers a revised Bridge Facility of up to £20 million to provide funding to Flybe Limited, of which £10 million will be released on 15 January to support the business. A number of “improved agreements” have also been reached with banks to improve liquidity.
The consortium has also confirmed that its plans for the future of the Flybe business remain as set out in the Recommended Offer, including its commitment to provide £80 million of further funding.
Flybe said in the update: “The Board of Flybe believes that obtaining this revised facility from the Consortium provides the security that the business needs to continue to trade successfully.”
Under the consortium, Flybe will continue to serve customers across the UK and Ireland but will be rebranded to Virgin Atlantic.
The group intends for Flybe to continue as an independent operating carrier with a separate UK Air Operator Certificate (AOC) under the Virgin Atlantic brand. Stobart Air is intended to continue under a separate Irish AOC.