flybe. (2002) (Exeter) has launched a GBP150million (USD182.25million) share issue to help shore up its capital reserve and to help drive profitable growth. In a statement, the airline said the initiative involves a Firm Placing and Placing and Open Offer of up to 141'501'920 New Ordinary Shares at an Offer Price of 110 pence per New Ordinary Share.
Chief executive, Saad Hammad, commented: "We have made significant progress over the past year in stabilising, restructuring and reconfiguring the group. Today I am pleased to announce a GBP150million fully underwritten capital raise which will significantly strengthen our balance sheet and provide capital to pursue our profitable growth strategy."
The capital increase is conditional on the passing of the resolutions at the airline's upcoming AGM. Should the resolutions be passed, Flybe expects dealings in the new ordinary shares to start on March 12.
Funding will go towards strengthening the Group’s balance sheet as well as reducing fleet ownership costs. The carrier's directors intend to deploy capital to own aircraft with secured loans rather than full operating leases, thereby balancing Flybe’s fleet financing structure more towards ownership rather than operating leases.
The added liquidity will also be used to develop the airline into a regional “white label” provider, in which it provides crew under contract on a maintained and insured aircraft belonging to Flybe but operated on behalf of a third party airline (as it currently does for Finnair (AY, Helsinki Vantaa) in Finland and Brussels Airlines (SN, Brussels National) in Belgium). The board says it has identified a number of national airlines in Europe for whom white label flying could be attractive, and are in ongoing commercial discussions with several of these airlines.
