UK-based regional carrier Flybe has told its shareholders that it will have to close down operations if they vote against the proposed sale to Virgin Atlantic and Stobart Group.
In a statement yesterday, the airline warned that losing the sale would mean investors risk walking away with nothing for their shares.
Major shareholder Hosking Partners questioned the low price tag put on the sale and threatened a legal challenge. The firm accused Flybe’s directors of ‘breaching’ their duties to investors by not informing them of its financial situation soon enough, creating a ‘false market’ in the company’s shares. Flybe has admitted the 1p-per-share offer was “disappointingly low” but maintained its position that it’s the only deal on the table to save the airline.
Flybe is the largest independent regional airline in Europe, and carries 8 million passengers a year between 81 airports across the UK and the rest of Europe, with over 210 routes across 15 countries. Its two hubs are Manchester and Birmingham airports but it also has a number of codeshares allowing connections to long-haul flights with British Airways, Air France, Emirates and United among others.
Flybe’s cabin interiors are configured with a single-class all economy layout, with an allocated seating policy on all flights. Passengers have the option to choose a specific seat of their choice online in advance for a fee or have one allocated free of charge during online check-in or at the airport. The airline operates a buy on board program, called “Café Flybe”, offering food and drinks for purchase.
Flybe’s board approved the £2.2 million sale to Connect Airways, a consortium made up of Virgin Atlantic, Stobart Group and Cyrus Capital in January, but shareholders in the airline have yet to vote on the issue.
That sale is due to be completed on 22 February and does not need shareholder approval, but once it is finished the Flybe parent company will not have any remaining assets other than the cash from the sale. The airline says this means there will be no “remaining funds available for distribution to Flybe shareholders”. Shareholders will vote on the deal at a court meeting in London on March 4.