Flybe Group Plc would no longer be backed by its majority shareholder. Rosedale Aviation Holding had exited from its 48.1% interest in the airline carrier to institutional investors. As a result. Flybe said in its statement on Wednesday that its free float was expected to increase 85%.
Liberum analyst Gerald Khoo said to Reuters, "Rosedale is effectively (Flybe's) founding shareholder. It has presumably been looking to diversify its investment over the long term and the IPO of Flybe was part of that process - the sale of the remaining stake yesterday completes that process."
Rosedale's ownership stake was sold through Liberum Capital. Although the company declined to provide additional details, it said the buyers were institutional investors in the UK, At closing on Tuesday, Rosedale's ownership satke was worth GBP38 million or USD60.52 million.
The steel magnate Jack Walker family trust-controlled Rosedale had an ownership stake in Flybe as high as 69%. When the carrier got listed in December 2010, the trust's interest dropped to under 50%.
On the other hand, Flybe Chief Executive Saad Hammad had indicated that some of the carrier's existing investors cranked up their holdings in Flybe in line with the transaction. British Airways owner International Consolidated Airlines Group is the second largest shareholder of Flybe at 15% as of June 14. Billionaire investor George Soros and Flybe's former chairman Jim French are also investors of the carrier.
On Wednesday morning, Flybe's shares had dropped to as high as 15% in early trade. This, Reuters said, had made the carrier's stock one of the biggest losers in terms of percentage on the London Stock Exchange.
The market lately had not been kind to European airlines. As a response to skyrocketing costs in fuel, airport charges and a decrease of the demand in travel had prompted Flybe to close its loss-generating routes. On Monday, Flybe said it would be cutting 500 jobs and surplus capacity, review its fleet mix, improve utilization of aircraft and crew, and reduce its routes in the hopes to curb spending.
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