Flybe has announced plans to raise £150 million from investors in a move its new boss hopes will end a period of turbulence at the struggling regional carrier.
Saad Hammad said the money, which is almost double the size of Flybe’s market capitalisation, will be used to develop new routes, improve IT and strengthen its balance sheet. It will be raised in a fully underwritten placing and open offer of shares.
Hammad said: “We have made significant progress over the past year in stabilising, restructuring and reconfiguring the group. We are entering an exciting phase in our development.”
Flybe has endured a torrid time of late and not only reshuffled its management team last year but outlined plans to cut more than £30 million in costs and an estimated 1040 jobs.
It is also piloting a plan to doubled the amount of flights it operates between Newquay and Gatwick to take advantage of the popularity of the service.
Analysts at Liberum, which is acting as an adviser to Flybe, said: “Some £68 million of the proceeds have been earmarked for balance sheet reinforcement.
“We believe this should be viewed positively, given that the group would clearly benefit from having a larger buffer to deal with the external shocks that hit the airline industry on an all-too-frequent basis.”
Shares in the company fell 2.99p to 115.51p.
