Flybe considers £150m share issue
Flybe is looking to raise up to £150 million though a share issue to invest in the group in a move announced today.
The offer for 141,501,920 new ordinary shares, costing 110p per share is hoped to raise money for a new investment to improve the company’s customer services and infrastructure.
The offer price is a discount on the closing mid-market share price on February 19 which stood at of 118.5p.per ordinary share.
Flybe said that, funding raised by the share issue would be spent to improve the airline’s flexibility, strengthen its balance sheet and improve its product range and brand impact.
More money will also be spent on Flybe’s fleet meaning more of the airline’s planes will be owned outright rather than operated on a secure loan operating lease.
Funding will also be funnelled into the group’s infrastructure including its IT and finance which is hoped to improve efficiency.
Any additional funds will beused to build cash reserves to enable the airline to protect itself from unforeseen disruptions.
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."
Money may also be spent on expanding the airline’s scheduled commercial operation by developing new routes and bases within the UK within the next two years.
Speaking at a press conference earlier today, Mr Hammad said: “We’re not being prescriptive at this stage we’re still at that evaluation process and we’re in advanced discussion at this stage with various airports also around the deployment or the launches of these new routes so I can’t possibly comment at this point in terms of specific routes.
“We’re looking at where we can deploy our capital most efficiently and sustainably so we can serve markets on an ongoing basis.
“We will always have an ongoing process of optimisation as long as we continue to deliver a good performance on the routes that we have of course we will maintain and build on that strength.
“Right now the outlook is very bright indeed in terms of what our schedule looks like, the performance on our routes, across the whole network not just in Exeter.
“There may be changes going forward, they may be seasonal routes which we do that we may not do the following year.
“We have to deploy capital where we get best return and that’s what our owners are looking for us to do.”
Since rail transport into the South West peninsula was closed off after the destruction of track at Dawlish Flybe has increased its service from Gatwick to Newquay.
Mr Hammad said: “We doubled our frequency from three daily to six daily, given what happened on the trains there
“This is who we are, we are a responsive regional airline, that will also behave responsibly.
“We re-structured our normal pricing mechanisms and we were very disciplined in that process to again make sure people understand we’re not just there at the good times we’re also there to be responsive when things are tough in the regions in which we operate.”
The capital raise has yet to be approved at a general meeting but if given to go ahead is expected to commence on March 12.
