The Connect Airways consortium comprising Virgin Atlantic, Stobart Aviation and hedge fund Cyrus Capital has completed the acquisition of the assets of troubled UK-based airline Flybe.
The closure of the deal comes after the airline put itself up for sale last November.
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For the six months until last September, the airline’s profits dropped as a result of weak consumer demand, higher fuel costs and a weak currency.
Prior to choosing the consortium’s offer ahead of the deadline on 22 February, Flybe rejected a rescue bid proposed by its shareholders, terming the offer ‘highly conditional’.
The rival bid made by an investor group led by Bateleur Capital and Mesa Air Group contained a contingency proposal for a capital injection and replacement of funding provided by Connect Airways.
Flybe signed a share purchase agreement with Connect Airways, according to which it completed the sale of its operating business to the consortium.
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By GlobalDataThe regional airline has also drawn down the first £15m of the £20m secured committed credit facility offered by the Virgin-led group.
In the build-up to the completion of the sale, the airline went into administration, citing uncertainty over Brexit.
In a statement, Flybe said: “The board does not believe that the indicative proposal is executable in the timeframe required to enable Flybe to continue to trade.
“Accordingly, the board emphasises to shareholders that it continues to regard the arrangements entered with Connect Airways as being the only viable option available to the company, which provides the security that the business needs to continue to trade successfully.
“The arrangements with Connect Airways preserve the interests of Flybe’s stakeholders, customers, employees, partners and pension members.”
In addition, a 1p per share offer made by Connect Airways last month for the holding company remains subject to shareholder approval.
Flybe’s directors urged the shareholders to accept the offer at a meeting set to take place next month.
