Flybe to divest 60% stake in Flybe Nordic JV with Finnair for EUR1

Finnair and Flybe entered (12-Nov-2014) into a conditional share sale agreement of Flybe Nordic, with Flybe agreeing to sell its 60% stake in the joint venture to "a potential new majority shareholder or to Finnair" for the price of EUR1. The sale of the shares is conditional only upon approval being received from the competition authorities. Flybe Nordic is also the full owner of subsidiary Flybe Finland, which operates regional services on behalf of Finnair. Finnair stated it is currently "mapping alternatives to continue Flybe Finland's regional flying with a cost-effective business model and new ownership structure for Flybe Nordic. These alternatives include a potential new majority shareholder for Flybe Nordic." Finnair added: "The companies have already for some time discussed the restructuring and cost saving strategy for Flybe Finland. The companies have not been able to arrive at a common understanding to resolve profitability issues. Flybe and Finnair accordingly have signed an agreement under which it is intended that Flybe will exit Flybe Nordic by the end of 2014, subject to approval being received from competition authorities. The operations and flights of Flybe Finland will continue normally." Finnair CEO Pekka Vauramo stated: "The financial performance of our joint venture has not developed according to the expectations of its shareholders. We haven't been able to arrive at a common view to resolve the profitability issues, and therefore the companies have agreed to discontinue the cooperation. Finnair aims to find a new majority shareholder and a business model that would enable the development of regional flying in a financially sustainable way." In addition to writing down the value of its 40% stake in Flybe Nordic, Finnair has "advance payment and other operational receivables from Flybe Finland." Finnair stated: "Due to Flybe Finland's ownership change and the need to restructure its operations, it is possible that a part of these receivables cannot be collected. Finnair is also considering giving working capital financing to Flybe Finland. Finnair estimates that the resulting financial impacts will not exceed -20 million euros. The exact overall impact will be communicated when the ownership structure is defined." [more - original PR - Finnair - English/Finnish] [more - original PR - Flybe]