Flybe administrators detail likely creditor payouts

Flybe’s largest creditor DLP Holdings – a Luxembourg company linked to the airline’s owners – is unlikely to receive the entirety of the near GBP50m it is owed, according to the administrators of the defunct UK regional carrier. Detailing the progress of their administration on 17 August, David Pike and Mike Pink from Interpath Advisory, said DLP Holdings will “suffer a shortfall in their indebtedness”. However, that figure is not quantified. DLP Holdings, which had in April 2021 acquired assets, including the brand, from previous incarnation of Flybe after that business failed in March 2020, had lent the new airline a total of GBP49m through separate agreements. A term loan facility saw it advance GBP20m, while separate deals saw a further GBP29m loaned out, both secured against Flybe’s assets. However, the GBP20m loan was subject to a so-called “subordinated clause agreement” between Flybe, DLP Holdings and the UK Civil Aviation Authority, designed to ensure that other creditors are paid first. DLP Holdings is wholly owned by funds managed by Cyrus Capital Partners, a company behind Flybe’s previous iteration. The airline’s preferential creditors – its 279 employees and the UK’s tax authorities – should be paid the entirety of their respective GBP243,000 and GBP218,000 claims, the report says. However, the picture for Flybe’s 28,000 unsecured creditors is less rosy: although the administrators forecast a “small” dividend will be paid, they note the amount is dependent on the total value of claims and the costs related to agreeing and distributing the funds. Claims from unsecured creditors were put at GBP20.9m in the directors’ statement of affairs, issued in March. Any dividend will also be drawn from the “prescribed part” only – a ring-fenced total capped at GBP800,000 before costs.<br/>