Flybe in £150m fund-raising

REGIONAL airline Flybe, one of the largest operators at Manchester Airport, is is launching a £150m share issue to generate funds to invest in the group and strengthen its financial position.

The airline’s board said the offer comprised of up to 141,501,920 new ordinary shares at a price of 110p per share.

The offer price represents a discount of 7.2% on the closing mid-market price of 118.5p on February 19.

Qualifying shareholders are being offered the opportunity to participate in the open offer on the basis of two open offer shares for every three existing ordinary shares held by them at the start of the offer period.

The airline said it would shortly be publishing a prospectus detailing the offer and would convene a general meeting to approve the placing and offer.

Saad Hammad, Flybe’s chief executive said: “We have made significant progress over the past year in stabilising, restructuring and reconfiguring the group.

 “Today I am pleased to announce a £150m fully underwritten capital raise which will significantly strengthen our balance sheet and provide capital to pursue our profitable growth strategy.

 “We enter an exciting phase in the group’s development as we continue to build Europe’s best regional airline.”

The airline said the fundraising would help strengthen the group’s balance sheet, improve operational flexibility and provide additional cash reserves to help insulate itself from “unforeseen disruptions or occurrences”.

It will also reduce fleet ownership costs by deploying capital to its own aircraft with secured loans rather than full operating leases, thereby rebalancing Flybe’s fleet financing structure towards ownership rather than operating leases.

Improved productivity by investment in improvements to the group’s IT and finance functions, an enhanced customer service, new routes and an expansion of the group’s white label service agreements are also promised.