Controversial Sale to Virgin Completed By Flybe

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Flybe has completed its controversial sale to a consortium that is led by Sir Richard Branson’s Virgin Atlantic for only 1p per share.

The takeover of the troubled regional airline came after the operator turned down a rival rescue proposal from its investors.

Flybe said that it did not believe that the “highly conditional” plan, that is supported by a consortium that included Arizona-based Mesa Air, could be carried out in a timeframe to enable it to continue to trade.

It was offering significantly more per share as compared to the Connect Airways consortium, which consists of Stobart Group, Virgin Atlantic, and Cyrus Capital, an investment company.

However, Flybe said that it saw the existing Connect offer as the “only viable option available to the company which provides the security that the business needs to continue to trade successfully.”

It pointed out that it had already drawn down £15 million in working capital from Connect as part of the said deal.

The sale indicates the end of a cut-price takeover saga that has gripped the City in the past weeks.

Hosking Partners, the owner of 19 percent of Flybe, has expressed its rage at the decision of its board to recommend the 1p-a-share offer of Connect Airways for the holding firm while selling its main assets in a separate deal that is worth £2.8 million only.

A formal sale process has been launched by Flybe last autumn. It blamed a toxic cocktail of currency volatility, increasing fuel costs and Brexit-related uncertainty.

An industry price war has also intensified the financial troubles of the airlines, with Ryanair blaming the issue for a recent profit warning.

Recently, Flybmi, an unconnected company, fell into administration and cancelled all its flights.

The British firm flew 17 regional jet aircraft on routes to 25 European cities. It blamed the Brexit uncertainty as one of the main reasons for its collapse.