Stobart Group Limited Investment in Connect Airways (0532A)
16 Gennaio 2020 - 12:17PM
UK Regulatory
TIDMSTOB
RNS Number : 0532A
Stobart Group Limited
16 January 2020
16 January 2020
STOBART GROUP LIMITED
('Stobart Group' or 'the Company')
Investment in Connect Airways
Stobart Group, the aviation, energy and civil engineering group,
provides the following update in relation to its investment in
Connect Airways.
Connect Airways is made up of a consortium of shareholders
encompassing Cyrus Capital (40%), Virgin Atlantic (30%) and Stobart
Group (30%) that acquired the assets of Flybe. The shareholder
consortium has to date provided GBP110m of funds to Connect
Airways, and Stobart Group has invested GBP45m through a
combination of cash and the sale of Stobart Air, Stobart Group's
regional airline, and its aircraft leasing business, Propius.
The Connect Airways consortium has worked tirelessly alongside
Flybe and the UK Government to look for solutions to ensure the
financial viability of the airline so that consumers can continue
to have confidence in flying with Flybe.
Following these discussions, it has been agreed that;
-- As announced, the Government will review the application of
Airline Passenger Duty (APD), with the intention to provide a
further update at the time of the March Budget.
-- The Government has further announced a review of regional
connectivity. Government support for regional routes that connect
key parts of the UK economy would further enhance the viability of
UK domestic flight provision, as well as supporting economic growth
in those regions.
-- The Connect Airways consortium has committed to providing
Flybe further short-term funding with Stobart Group contributing up
to GBP9m of capital, with the funds drawn down only if
required.
Background to the investment in Connect Airways
The combination of Flybe with Stobart Air and Propius provides
the opportunity to establish a compelling proposition with a
comprehensive regional network in the UK and Ireland while enabling
Stobart Group to concentrate on its strategic focus for developing
airport and aviation services assets.
The investment further provided the potential for growth at
London Southend Airport, which is in turn owned by Stobart Group.
On 13 November 2019, Flybe announced its intention to offer flights
to 10 destinations from London Southend Airport from Summer 2020.
These destinations are expected to attract circa 500,000 passengers
annually to London Southend Airport.
However, though the Consortium announced its intention to
acquire the assets of Flybe in January 2019, it did not receive
merger control clearance from the European Commission for its
acquisition of Flybe until 5 July 2019. The delay in receiving
control, coupled with a number of other factors including legacy
issues, impacted on the delivery of the Consortium's turnaround
plan for Flybe. This resulted in a situation in which a further
injection of funds is required to ensure continued flying.
Enquiries:
Stobart Group Limited C/o Newgate Communications
Charlie Geller, Head of Group Communications
Newgate Communications +44 203 757 6880
Robin Tozer stobart@newgatecomms.com
Giles Croot
Megan Kovach
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Authority to act as a Primary Information Provider in the United
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of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
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