Virgin-Stobart consortium lifts Flybe offer; revises loan deal

Troubled UK airline Flybe on Tuesday said it had reached an agreement to sell its main trading company and digital operation to a Virgin-led consortium for an increased £2.8m.

It added that it had reached a deal on a revised bridging loan of up to £20m to provide funding to the Flybe Limited trading company, of which £10m was made available immediately to support the business.

The Connect Airways consortium will buy Flybe Limited and Flybe.com. Last week it made a 1p-a-share offer for the whole group, valuing it at £2.2m.

The new loan arrangements came after Flybe was unable to meet conditions on a £20m loan for working capital needs. A number of “improved agreements” with banks have also been reached to improve liquidity, Flybe said.

The news came as it emerged on Monday that former Stobart chief executive Andrew Tinkler, bought 12% of Flybe.

Tinkler has been locked in a court battle with his former employers over his ousting.

Connect Airways is made up of Virgin Atlantic, Stobart Group and Cyrus Capital.