Flybe in £60m flotation
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 at Manchester Airport, said it would raise £60m in the listing.
Exeter-based Flybe intends using around half of the net proceeds from the 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 code-share 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.
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.”
British Airways, which sold its loss-making Manchesterr-based BA Connect business to Flybe three years ago, is to buy enough shares to maintain its 15% stake in the business.
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.
Manchester advisers are playing a key role in the IPO process.Rickitt Mitchell is corporate financial advisers to Flybe, while the Manchester office of Eversheds is providing legal advice to the company.
The Rickitt Mitchell team, led by manaaging partner Paul Mitchell, has a long-standing relationship with the airline and advised on its acquisition of BA Connect.
