Flybe to raise £150m to fuel its turnaround
FLYBE is tapping investors for £150m to help fund its recovery plan under new chief executive Saad Hammad.
The regional airline said the share issue – worth nearly twice the firm’s market value – will fund plane purchases to keep its rental costs down and allow the firm to revamp its routes.
Flybe has been hammered in recent years as growth in domestic air travel stalled while costs soared, triggering several profit warnings.
Hammad joined Flybe from EasyJet in August, in a reshuffle that saw Jim French leave the company after more than 20 years. Chief financial officer Andrew Knuckey is also heading for the exit once a replacement is found.
Hammad plans to cut costs by £26m in the coming year, partly through 450 job cuts.
He said support for the share placing so far showed “a real belief in the management team we’ve assembled”.
The firm’s larger investors will be offered two new shares for every three shares they currently hold at a discount of 7.2 per cent.
Following Rosedale’s decision to sell out of its 48 per cent stake in November, the firm’s shareholder base has shifted, with Hammad describing it as “very blue-chip” yesterday.
Hammad told journalists that the firm is in talks with flag carriers to offer white label flights, which it already provides to Finnair, as a fresh source of growth.
Flybe is also rejigging its routes, with some bases set for the chop as the firm tries to target more profitable services.
ADVISERS | FLYBE’S £150M FUNDRAISING
LIBERUM is up to bat for Flybe as the airline raises £150m through a share issue.
The investment bank has advised Flybe since October, replacing Espirito Santo, and worked on the placing of 48 per cent of the company’s shares when major investor Rosedale exited in November.
Liberum is underwriting yesterday’s share sale as well as acting as broker, financial adviser and sponsor. Leading on the deal is Richard Crawley, a recent hire in the corporate finance team.
Crawley joined Liberum at the end of last year, following in the footsteps of Peter Tracey, who is also working with Flybe. The pair were respectively head of corporate broking and head of investment banking and capital markets at Espirito Santo.
Before this, Crawley worked for Oriel Securities as head of corporate finance and broking, and spent a decade at BZW.
Working alongside the duo on the Flybe share sale are Tom Fyson and Jamie Richards.
Liberum has been advising on a number of deals in recent weeks including the Aim float of Manx Telecom last week and a £75m share placing for New River Retail.