Flybe announces intention to float
FLYBE, Europe’s largest regional airline, has announced its intention to proceed with a planned flotation on the London Stock Exchange.
The airline, the largest in terms of traffic movement at both Birmingham International Airport and Manchester Airport, said the base offer size was approximately £60m in new shares.
Flybe intends using around half of the net proceeds from the Global Offer to provide it with capital to fund the expansion of its fleet. The other 50% will strengthen the company’s cash position with a view to further growth through continental Europe.
It said growth opportunities included the expansion of codeshare arrangements, strategic arrangements with other European airlines and targeted acquisitions – should these present themselves.
There has been speculation about the flotation for some time with many observers believing the company opted to delay its plans until the European airline industry recovered from recession.
Commenting on the announcement, Jim French, Flybe’s chairman and chief executive, said: “We are delighted to bring Flybe to the market. The company has come a long way in a short time, from its origins as a provincial carrier to being one of Europe’s leading regional airlines.
“A listing will assist Flybe in achieving the next stage in its exciting strategy for growth. We look forward to welcoming new shareholders on board for the next leg of our journey.”
Mark Chown, deputy chairman of Flybe and corporate representative of Rosedale Aviation Holdings Ltd, Flybe’s largest shareholder, said: “Flybe has a proven and resilient business model with an experienced management team capable of realising significant future growth opportunities.
“Rosedale believes it is the appropriate time for Flybe to maximise its growth potential through access to the capital markets. Rosedale has been a shareholder in the business for over 25 years and intends to remain a significant shareholder following the IPO and looks forward to participating in the future success of Flybe as a listed company.”
British Airways has also announced its intention to buy up enough shares to maintain its 15% stake in the business. The shares are currently held through BA subsidiary The Plimsoll Line Ltd.
Willie Walsh, BA’s chief executive, said: “We are delighted to participate in the Flybe IPO. Since our divestment of BA Connect to Flybe in March 2007, we have been impressed with the achievements of Flybe and its management team. We are committed to supporting Flybe in its listing and capital raising, and wish Jim and the team every success as a public company.”
Flybe operates 14 Embraer E195 (118-seat) regional jets and 54 Q400 (78-seat) turboprops. These aircraft are deployed on 215 UK and European routes from 73 airports across 13 countries.
In September the airline reported a near halving of its annual pre-tax profits , seeing the figures fall from £12.8m in 2008/09 to £6.8m for the year ended March 31, 2010.
