CityJet would be major partner in possible merger with Stobart
Published 15/05/2016 | 02:30
A decision on whether Stobart Air and CityJet will merge is likely to be made by the summer, it's understood.
And the Sunday Independent also believes that if a deal is struck, it will involve CityJet taking a substantial majority stake in the merged business, with existing shareholders in Stobart retaining a small minority.
Stobart Air operates the Aer Lingus Regional services on a franchise basis, and generates virtually all its revenue from the partnership. CityJet, which is based in Dublin, has its main operational base in London City Airport.
It's not clear that Invesco Perpetual, whose desire to exit its investment in Stobart precipitated a sales process, would remain a shareholder as part of a merger.
It's also thought that a merger deal envisages Aer Lingus cutting its stake in a Cayman Islands vehicle called Propius Holdings, which was used to acquire aircraft used by Stobart. Another investor would then take an up-to 66pc majority stake in Propius.
CityJet declined to comment, as did Stobart Air.
Last week, Stobart Air announced that chief executive Sean Brogan is leaving the airline. He is understood to have tabled a rejected management buyout offer for the carrier.
It's thought that the possible merger between CityJet and Stobart Air remains on the table, but that knitting them together would be complicated.
Sunday Indo Business