Flybe Group says it has reached an amended bridging loan agreement with Connect Airways concerning the latter's takeover of flybe. (2002) (Exeter).
The group said in a stock exchange filing that despite significant efforts, it had not been able to satisfy the conditions laid down by Connect Airways for it to access a committed credit facility of up to GBP20 million (USD25.7 million). As such, it had been unable to draw any funds under that agreement.
However, despite this stumbling block, Flybe said it had now been able to reach a revised bridging agreement with Connect Airways wherein the consortium would avail up to GBP20 million in funding to Flybe, of which GBP10 million (USD12.85 million) will be released immediately to support the business. In addition, a number of improved agreements with banks have also been reached to improve Flybe.'s liquidity.
Flybe Group has, in turn, said it will sell its main trading company and online business to Connect for GBP2.8 million (USD3.6 million).
Connect Airways is a consortium whose shareholders include DLP Holdings, S.a.r.l., an entity wholly-owned by funds managed by Cyrus Capital, with 40%; Stobart Aviation, a wholly-owned subsidiary of Stobart Group with 30%; and Virgin Travel Group Limited, a wholly-owned subsidiary of Virgin Atlantic, with 30%.
Immediately prior to completion of the Flybe deal, Connect Airways will acquire Stobart Air and Propius Leasing, Stobart Group's regional airline and aircraft leasing business. Though part of the same group, Flybe and Stobart Air will retain their respective UK and Irish Air Operator's Certificates (AOC) although Flybe will be rebranded as Virgin Atlantic. Connect Airways has also reaffirmed its intention to provide GBP80 million (USD102.8 million) worth of additional funding to the carrier group once the deal is completed.
