Shares were sent crashing 80 per cent this morning on news of the offer from Virgin Atlantic, Stobart Aviation and USA private equity firm Cyrus Capital Partners, which will leave shareholders with just a penny per share - a far cry from Thursday's closing price of 16.38p.
A consortium led by Richard Branson's Virgin Atlantic and Stobart Group has agreed an offer to take control of Exeter based airline Flybe, valuing it at £2.2 million.
The struggling regional airline Flybe has agreed to be taken over for £2.2 million by a consortium comprising Virgin Atlantic, Stobart Group and the USA hedge fund Cyrus Capital Partners.
Cyrus, Stobart and Virgin Atlantic said it would provide a £20m bridge loan facility to support Flybe's ongoing working capital and operational requirements.More news: World leaders shun Venezuela as 'dictator' Maduro sworn in
"Flybe plays a vital role in the UK's transport infrastructure with a United Kingdom regional network which uniquely positions it to benefit from growing demands from long haul carriers for passenger feeder traffic".
Flybe chief executive Christine Ourmieres-Widener said: "Flybe plays a vital role in the UK's transport infrastructure with a United Kingdom regional network which positions it well to benefit from growing demands from long haul carriers for passenger feeder traffic".
Christine Ourmières-Widener, Flybe's chief executive, said the industry has been suffering from higher duel costs, currency fluctuations and "significant uncertainties" presented by Brexit.
Virgin Atlantic and Flybe already have a codeshare agreement in place, meaning that passengers are able to transfer between the two airlines on selected flights.More news: Trump cancels Davos trip over partial govt. shutdown
"We have been affected by all of these factors which have put pressure on short-term financial performance", she said.
The consortium's bid, if accepted by shareholders, would seek to feed regional customers to the long-haul networks of Virgin Atlantic and its American joint venture partner, Delta Air Lines, at Heathrow and Manchester airports. At the same time, Flybe suffered from a number of legacy issues that are being addressed but are still adversely affecting cashflows.
Warwick Brady, chief executive of Stobart Group, said it would also be an opportunity to expand passenger numbers at Southend airport, which it owns, along with Carlisle airport.More news: New Zealand vs Sri Lanka - T20 International Preview & Prediction