Flybe has rejected an alternative financial offer from former Stobart chief executive Andrew Tinkler.

The UK regional carrier, which is being rescued by a Virgin Atlantic-led consortium following a profit warning in November, confirmed receiving an approach by Tinkler on Friday.

This was described as a “very preliminary, short and highly conditional outline contingency proposal” which included a capital injection and replacement of the funding provided by the Connect Airways consortium led by Virgin Atlantic, Stobart Aviation and hedge fund Cyrus Capital Partners.

Flybe held an initial discussion with Tinkler’s advisers and no formal proposal was made.

The airline said in a statement this morning that the capital injection would only be provided by Tinkler if the sale of Flybe’s operating businesses to Connect Airways does not complete.

“The board does not consider that the preliminary proposal offers the certainty required to secure the future of Flybe,” the airline said.

“Accordingly, the board emphasises to shareholders that it continues to regard the arrangements entered into with Connect Airways as being the only viable option available to the company which provides the security that the business needs to continue to trade successfully.

“The arrangements with Connect Airways preserve the interests of Flybe’s stakeholders, customers, employees, partners and pension members.”

Connect Airways committed to make available a £20 million bridge facility to support Flybe’s ongoing working capital and operational requirements as part of its planned takeover.

Following completion, the consortium intends to provide up to £80 million of further funding to invest in its business and support its growth, as well as a contribution of Stobart Air.

“Flybe continues to work with Connect Airways on the sale of Flybe’s operating businesses,” the statement added.

The agreement is subject to only a limited number of conditions and progress is being made to meet those conditions, with a deadline for the deal set for February 22.

Connect Airways has now provided the first £15 million of the £20 million secured committed credit facility,” the airline added.

“Flybe continues to receive payments from its credit card acquirers in accordance with the arrangements agreed at the time of the share purchase agreement (SPA) being entered into.

“The arrangements with the company’s credit card acquirers and banks are important to enable Flybe to continue to trade and are conditional themselves upon the SPA completing.

“Following completion of the SPA, the company will be a non-trading entity with no subsidiaries and no material assets other than the cash remaining from the £2.8 million consideration received under the SPA, which will be required to cover transaction costs and residual and rundown costs of the company.

“It is anticipated that, after meeting these costs, there will not be any remaining funds available for distribution to shareholders.”

The proposal would see Flybe being rebranded as Virgin Atlantic.

At the same time Flybe confirmed that it has now received a “valid request” from investment group Hosking Partners, which owns a near 19% stake in the carrier, to convene a general meeting to consider resolutions to appoint Eric Kohn as a director and remove chairman Simon Laffin.

Kosking wants Kohn, a former airline executive, to investigate the Connect Airways offer.

The airline said: “Flybe has again informed Hosking that this resolution would, if proposed, be ineffective as the company’s articles of association do not confer on members the necessary powers.”


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