Southend airport owner Stobart Group has secured £100 million through a fundraising exercise.

The share placing was confirmed the day after the company revealed losses of more than £54 million associated with the collapse of Flybe.

Stobart was part of the Connect Airways consortium alongside Virgin Atlantic and Cyrus Capital which acquired the regional carrier.

But Flybe entered administration after a proposed rescue finance package in March was hit by the emerging Covid-19 crisis.

“The equity accounted losses and the impairment of receivables totalled £54.2 million,” Stobart said.

The company’s financial results for the 12 months to February outlined plans to stabilise operations “severely impacted” as a result of the pandemic, including placing half of staff on furlough and senior management pay cuts.

It incurred a loss of £150 million in the period from a loss of £42 million in the same period the previous year.

The group announced plans to raise more than £120 million through a combination of additional bank facilities of £40 million and new equity of £80 million.

Stobart then confirmed the £100 million share offer.

Chairman David Shearer said: “We are delighted to have received support from both our existing shareholders and new investors for our equity issue, which will place the group on a sound financial footing going forwards.”

Stobart revealed plans to to design and implement an improved passenger experience for post-Covid 19 travel, making use of “significant unutilised space and technology” to enhance passenger confidence, while providing a cost-efficient base of operation to airlines.

Chief executive Warwicl Brady said: “We are announcing a clear plan to stabilise the business and provide a secure platform to move forward.

“We have a cost-efficient proposition for airlines and will further develop our passenger-focused airport experience that seeks to maintain passenger flow and provide enhanced customer confidence.

“Therefore, we will focus our investment and our business in this asset by seeking to dispose of our non-core businesses and, in due course, monetise Stobart Energy.

“The launch of the capital raise will provide the group with the financial resilience necessary in the current environment and ultimately to position the business for success in the post-Covid environment.”

Passenger numbers at London Southend airport were up by 43.1% to 2.1 million in the year to February.

The company confirmed that a deal to buy back the Stobart Air and Propius aircraft leasing businesses from the Connect Airways administrator was completed in April.

The group plans to continue run these while working with franchise operator Aer Lingus to identify a new partner “to take business forward”.

“The group will seek to mitigate its legacy liabilities and plans to exit the business fully once the crisis period has passed,” Stobart said.

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