Stobart revives €14m buyout of leasing firm from Aer Lingus despite scrapping Cityjet merger
Stobart Group is pressing ahead with the €14m acquisition of a 33pc stake in an aircraft-leasing firm that supplies its planes - despite a wider plan to merge with CityJet being scrapped at the last minute before Christmas.
UK-based Stobart, whose Dublin unit Stobart Air operates the Aer Lingus Regional service under a franchise, announced in November that it intended to buy the stake in the Propius leasing firm from Aer Lingus.
That was in advance of the then expected acquisition of Stobart Air by Irish carrier CityJet.
Stobart had expected to complete the Propius acquisition by the end of 2016.
The Propius deal hasn't happened, but the Irish Independent understands that it remains an active transaction, despite CityJet pulling the plug on its planned acquisition of Stobart Air in December.
That move cast a major doubt over whether Aer Lingus would complete the sale of its Propius stake.
Propius Holdings is based in the Cayman Islands. It was established in 2012 to support the expansion of Stobart Air, formerly known as Aer Arann. Propius initially acquired eight new turboprop aircraft, which were in turn leased to Stobart Air.
The other investor in Propius was Invesco, which was also a shareholder in Stobart Air's holding company, Everdeal.
As part of a complex set of interlocking deals, Invesco last year sold its interests in both firms as Stobart was packaging itself for sale to CityJet.
Invesco owned a 33pc stake in Propius, and 40pc of Everdeal.
It's thought that Stobart did not end up buying all of Invesco's stake as former Aer Arann chairman Pádraig Ó'Céidigh increased his stake in Everdeal from 5pc to 10pc under a pre-emption right.
In October Stobart said that it had agreed to pay Aer Lingus $14.7m (€14m) for its stake in Propius.
"The parties are currently negotiating contracts and the transaction is expected to complete during 2016.
"Following the acquisition of this stake, Stobart will own 100pc of the share capital of Propius," it said in a statement at the time. However, in December, CityJet terminated negotiations to buy Stobart Air that had been under way for almost a year.
CityJet, headed by executive chairman Pat Byrne, had grown frustrated at the length of time that it was taking Stobart to finalise the deal.
CityJet had intended to base aircraft at the Stobart-owned London Southend Airport to launch routes to Europe.
After the takeover was canned, that CityJet plan for the airport was ditched.
Stobart said that instead, it had inked an expanded franchise agreement with UK regional carrier Flybe for Stobart Air to fly up to 18 routes from Southend. Twelve of those routes were unveiled last month.
Stobart Air already operates a small number of routes for Flybe, whose new chief executive is former CityJet boss Christine Ourmieres-Widener.
Both Stobart and Aer Lingus declined to comment on the status of the Propius transaction.
Stobart Group recently hired former EasyJet chief operating officer Warwick Brady as its deputy chief executive. He will help develop its aviation interests.