Flybe to raise £150m through share issuePosted: February 20, 2014 | |
The offer price represents a discount of 7.2% to the closing mid-market price of 118.5p per ordinary share on February 19.
Flybe said the share issue would allow it to improve service to customers and develop its customer offering, product range and brand impact, as well as expanding its branded scheduled commercial operation by developing new routes and bases within the UK within 12 to 24 months. It will also expand its white label flying.
The group said the funding would strengthen its balance sheet, improve operational flexibility and provide additional cash reserves to enable the airline to protect itself from unforeseen disruptions.
It will also reduce fleet ownership costs by deploying capital to its own aircraft with secured loans rather than full operating leases, rebalancing Flybe’s fleet financing structure towards ownership rather than operating leases.
Flybe said the funding would allow the group to invest in its IT and finance functions, resulting in better infrastructure, cost savings and improved operating efficiency within 6 to 12 months.
Saad Hammad, 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 capital raise will have to be approved at a general meeting. If approved, it will begin on March 12.
Sourced from Travel Weekly