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Stobart Group liabilities 'in tens of millions'

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Aer Lingus Regional service

Aer Lingus Regional service

Aer Lingus Regional service

THE UK's Stobart Group has liabilities amounting to tens of millions of euro connected to Dublin-based Stobart Air, the Irish Independent understands.

The scale of the exposure - equivalent to a significant chunk of Stobart Group's market capitalisation - comes after the Irish Independent revealed this week Stobart Air's holding company, Connect Airways, had gone into administration.

Stobart Air operates the Aer Lingus Regional service on a franchise basis.

Stobart Group, whose CEO is Warwick Brady, has declined to specify how much the liabilities are. A spokesman for Stobart Group would yesterday only refer to a trading update issued by the firm on Tuesday.

"Stobart Group stated earlier this week that a number of guarantees and potential lease obligations exist between the group and the separate subsidiaries of Connect Airways, being Stobart Air and Propius, which have been impacted by the collapse of Flybe," he said.

"Stobart Group is actively evaluating how best to address and manage these liabilities and is in discussion with stakeholders regarding the most appropriate solutions," he added.

Flybe was part of Connect Airways and recently went into administration under accountancy firm EY.

The liabilities Stobart Group has are linked to a number of aircraft leases.

EY now controls a 49pc stake in Stobart Air. The other 51pc of the airline is owned by its more than 400 staff, with the shares having been transferred to a trust last year.

Connect Airways is 30pc owned by the listed UK Stobart Group. Virgin Travel Group, a subsidiary of Virgin Atlantic, also has a 30pc stake, while US firm Cyrus Equity Partners owns 40pc.

Asked if it had any concerns about the staff now owning such a large stake in the airline, Ireland's Commission for Aviation Regulation yesterday declined to comment.

"The commission is satisfied that Stobart Air meets the requirements to hold an operating licence," it said.

Irish Independent