Stobart Group confirms talks regarding its Stobart Air division
Stobart Group has confirmed it is in early stage talks about the potential sale of its stake in its Stobart Air business.
The Carlisle-based aviation and biomass group indicated during its July 30 annual general meeting that it would consider approaches from interested parties regarding the division, which operates an Aer Lingus regional franchise, due to expire in 2022.
In his AGM address, Stobart chairman David Shearer outlined the current situation for Stobart Air which has been hampered by a dramatic fall in passenger numbers due to the coronavirus pandemic, and various subsequent quarantine restrictions.
He said: “In order to optimise the existing fleet and to minimise financial exposure to the Stobart Group, Stobart Air has opened a new base at Belfast City Airport and has put on sale routes to Edinburgh, Glasgow, Manchester, Birmingham, East Midlands and Leeds Bradford under its Aer Lingus franchise agreement.
“Despite this positive progress, the operating environment remains challenging and costs are being closely monitored with steps being taken to conserve cash.
“Stobart Group’s overriding objective is to mitigate its financial exposure and we have commenced early discussions with potential partners around the long-term future of this business.”
Now, it has been reported by the Irish Independent, that Stobart Group is in “advanced talks” to sell its Dublin-based Stobart Air unit to aircraft lessor Falko, which is based in Hertfordshire, with operations in Dublin and Singapore.
It is claimed a deal could be worth more than £18m.
However, it is understood that this valuation would depend on Stobart Air signing an extension to its Aer Lingus franchise.
Today, Stobart Group issued a stock exchange announcement in response to the media speculation, saying: “Our AGM statement on 30 July 2020 stated that we had commenced early discussions with potential partners around the long-term future of Stobart Air.
“As part of this process, we can confirm that we are in early stage discussions with a number of parties, including Falko Regional Aircraft Limited, regarding the potential sale of Stobart Group’s stake in Stobart Air and Propius, and there can be no certainty that any transaction will be forthcoming or whether acceptable terms will be agreed.”
In April this year, The Stobart Group agreed an £8.55m deal to acquire Stobart Air and Propius – an aircraft leasing business that leases its eight ATR aircraft to Stobart Air – from business advisor EY, the administrators of Connect Airways.
The businesses were owned previously by Stobart Group and were sold to Connect in February 2019.
Connect was a joint venture between Stobart, Virgin Atlantic and Cyrus Capital Partners that was formed to acquire Flybe in February 2019, alongside the Connect sale.
The Stobart Air and Propius businesses had continued to operate independently within Connect and were, therefore, unaffected by the administration of Flybe in March this year.
