Stobart Group Limited Investement in Connect Airways (1138F)
05 Marzo 2020 - 8:05AM
UK Regulatory
TIDMSTOB
RNS Number : 1138F
Stobart Group Limited
05 March 2020
5 March 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 received EU merger clearance to take control of
the assets of Flybe Limited on 5 July 2019.
Flybe, a subsidiary within the Connect Airways group of
companies, has today ceased trading and will no longer be operating
its planned flight schedule. Stobart Group, alongside its
consortium partners, Virgin Atlantic and Cyrus Capital, are deeply
disappointed that Flybe has been unable to secure a viable basis
for its continuing operations and has therefore entered an
administration process. The consortium wishes to express its
immense gratitude to the 2,400 people employed by Flybe for their
commitment and energy over the past 12 months.
Stobart Group, Virgin Atlantic and Cyrus Capital formed the
Connect Airways consortium which intervened in 2019 to prevent the
collapse of Flybe and keep Europe's largest regional airline
flying. Customers and staff have been at the front of the
consortium's minds, and over the past 14 months Connect Airways has
invested more than GBP135m to keep the airline flying for an extra
year. This amount includes approximately GBP25m of the GBP30m
committed in January 2020.
Stobart Group's initial investment was made up through the sale
of Stobart Air and its aircraft leasing business, Propius. As a
result, the non-cash balance sheet impact on Stobart Group is
GBP43.3m and the additional GBP7m investment made in 2020. The
value of both these investments will now be written down to GBPnil
on its balance sheet. The Group has also foregone deferred interest
that it would have benefitted from in future periods. Stobart Group
had not expected to receive a contribution from Connect Airways
until after FY 2020.
Unlike Flybe, Stobart Air is not a wholly owned subsidiary of
Connect Airways. Stobart Air's Employee Benefit Trust (EBT)
controls 60% of the voting rights and Connect Airways controls 40%.
As such Stobart Air's ongoing ability to trade is not directly
impacted by the decision to place Flybe Limited into
administration.
Flybe had shown promising signs of a turnaround despite the
delay to receiving merger control clearance from the European
Commission for its acquisition . However, despite the best efforts
of all, not least the Flybe people, the impact of COVID-19 on
Flybe's trading means that the consortium can no longer commit to
continued financial support.
As a result of this news, London Southend Airport will see a
short-term impact, with Flybe having planned to operate ten routes
from the airport from Spring of this year. However, the long-term
prospects of that airport remain compelling.
Enquiries:
Stobart Group Limited C/o Newgate Communications
Charlie Geller, Communications Director
Newgate Communications +44 203 757 6880
Giles Croot stobart@newgatecomms.com
Ian Silvera
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END
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