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Stobart Group confirms plans to sell Stobart Air

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Stobart Group, whose chief executive is Warwick Brady, has previously said it eventually planned to exit its involvement in Stobart Air.

Stobart Group, whose chief executive is Warwick Brady, has previously said it eventually planned to exit its involvement in Stobart Air.

Stobart Group, whose chief executive is Warwick Brady, has previously said it eventually planned to exit its involvement in Stobart Air.

The UK's Stobart Group has confirmed it's in talks to sell Dublin-based Stobart Air, which operates the Aer Lingus Regional service, to leasing firm Falko.

The Irish Independent exclusively revealed the talks yesterday.

In response to the story, stock market-listed Stobart Group confirmed it's in negotiations with UK-based Falko, which also controls Dublin airline CityJet, and other potential suitors.

Stobart Group, whose chief executive is Warwick Brady, has previously said it eventually planned to exit its involvement in Stobart Air.

"We can confirm that we are in early stage discussions with a number of parties, including Falko Regional Aircraft, regarding the potential sale of Stobart Group's stake in Stobart Air and Propius," it said in a statement to the stock market yesterday afternoon.

Propius is an aircraft leasing vehicle.

"There can be no certainty that any transaction will be forthcoming or whether acceptable terms will be agreed," Stobart Group added.

The Irish Independent understands that a deal to sell Stobart Air to Falko could ultimately be worth more than €20m. It would also almost certainly lead to a tie-up between Stobart Air and Dublin-based CityJet, which recently exited examinership and is controlled by Falko.

It's understood that the value placed on an agreement to buy Stobart Air will be contingent on the carrier securing an extension to its existing Aer Lingus franchise contract, however. The current contract expires in 2022.

The deal could also reflect Falko assuming some of the significant liabilities that Stobart Group still has that are linked to Stobart Air.

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Stobart Group raised £100m (€112m) from investors in June to shore up its balance sheet. Some of the funds were earmarked to help Stobart Air, which like other airlines has been left reeling from the impact of the Covid crisis.

In April, when Stobart Group reacquired full control of Stobart Air, the company said that it intended to work with Aer Lingus to identify a new financial partner to support the business for the future, "with Stobart Group exiting its involvement in a controlled way at the appropriate time".

Falko, whose chief executive is Jeremy Barnes, is backed by funds controlled by US investment group Fortress.

The aircraft and engine lessor, which has offices in Dublin and Singapore, has a managed fleet of more than 100 regional aircraft.

It was a significant backer of CityJet, which was founded by Pat Byrne, for a number of years prior to the carrier's examinership that began in April. CityJet had more than €545m in liabilities at the time that process began. CityJet does not fly its own scheduled services. Its sole customer at the moment is SAS.

As part of the deal to exit examinership, Falko executive vice president James Greenstreet was appointed a director of the carrier.


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