Flybe Group To Raise GBP 150 Mln Through Share Issue

The Board of Flybe today announces a share issue to raise net proceeds of approximately £150.0 million by way of a Firm Placing and Placing and Open Offer of up to 141,501,920 New Ordinary Shares at an Offer Price of 110 pence per New Ordinary Share.

The Offer Price represents a discount of 7.2 per cent to the closing mid-market price of 118.5 pence per Ordinary Share on 19 February 2014, being the last Business Day prior to the announcement of the Firm Placing and Placing and Open Offer.

Qualifying Shareholders are being offered the opportunity to participate in the Open Offer on the basis of 2 Open Offer Shares for every 3 Existing Ordinary Shares held by them at the Record Date.

The Firm Placing and Placing and Open Offer is fully underwritten by Liberum Capital Limited.

Flybe will shortly be publishing a Prospectus in connection with the Firm Placing and Placing and Open Offer and will be convening a General Meeting to approve certain matters necessary to implement the proposed Firm Placing and Placing and Open Offer.

Summary
· Issue of 91,400,000 New Ordinary Shares through a Firm Placing to raise gross proceeds of approximately £100.5 million
· Issue of up to 50,101,920 New Ordinary Shares pursuant to a Placing and Open Offer to raise gross proceeds of up to approximately £55.1 million
· Qualifying Shareholders are being offered the opportunity to participate in the Open Offer on the basis of 2 Open Offer Shares for every 3 Existing Ordinary Shares
· Qualifying Shareholders are also being offered the opportunity to subscribe for New Ordinary Shares in addition to their Open Offer Entitlements under the Excess Application Facility
The Board believes that the Firm Placing and Placing and Open Offer will enable the Group to:
· strengthen the Group’s balance sheet, improving operational flexibility and providing additional cash reserves to enable the Group to protect itself from unforeseen disruptions or occurrences;
· reduce fleet ownership costs by deploying capital to own aircraft with secured loans rather than full operating leases, thereby rebalancing Flybe’s fleet financing structure towards ownership rather than operating leases;
· improve productivity by investing in improvements to the Group’s IT and finance functions, resulting in greater robustness in infrastructure, cost savings and improved operating efficiencies within 6 to 12 months;
· enhance service to customers and develop its customer offering, product range and brand impact;
· expand the Group’s branded scheduled commercial operation by developing new routes and bases within the UK within a 12 to 24 month timeframe; and
· expand the Group’s white label flying.

The Firm Placing and Placing and Open Offer is conditional on, among other things, the passing of the Resolutions at the General Meeting. If the Resolutions are passed and the other conditions to the Firm Placing and Placing and Open Offer are satisfied, it is expected that dealings in the New Ordinary Shares will commence at 8.00 a.m. on 12 March 2014.