Sale Completed Of Air Liberte

British Airways has completed the sale of its 86 per cent shareholding in French subsidiary Participations Aéronautiques, parent company of Air Liberté, to Taitbout Antibes BV, a European financial institution controlled by Groupe Alpha and Marine Wendel.


The terms of the sale value the whole of the existing shareholders’ interests in Participations Aéronautiques at approximately FFr 535 million (£47 million). This price is subject to a final adjustment, based on the audited net assets of Participations Aéronautiques at March 31, 2000. British Airways’ net cash proceeds from the sale are FFr 457 million (£40 million), subject to the final adjustment referred to above.


All the liabilities of Participations Aéronautiques and its operating subsidiaries have been transferred to the purchaser as part of the agreement.


The sale is not subject to regulatory approvals nor to any other conditions.


British Airways’ services between the United Kingdom and France are unaffected by the sale of its interest in Air Liberté. Air Liberte will continue to operate the flights it currently operates for British Airways - between Heathrow and Paris Orly, and between Gatwick and Bordeaux and Toulouse.

ADVERTISEMENT


Lord Marshall, British Airways’ Chairman, said: “Since British Airways’ initial entry into the French domestic airline market in 1993, competition has intensified significantly, both in the air, and on the ground from high speed trains. Despite the great efforts of the management team and employees, Air Liberté and, before it, TAT European Airlines, have not delivered an adequate return for British Airways’ shareholders. We have explored every option for resolving the matter, and the sale to Taitbout represents the best way forward for the shareholders of British Airways, for the employees of Air Liberté and for customers in France.”


Alain Blanc-Brude, Président du Directoire of Groupe Alpha, said: “Together with our existing businesses AOM and Air Littoral, the acquisition of Air Liberté creates the possibility for us to build a strong second force in the French airline market to the benefit of our customers, employees and shareholders.”


Notes to editors:


1 Taitbout Antibes BV is a European financial institution registered in the Netherlands. Taitbout is a company controlled by Groupe Alpha and Marine Wendel. Taitbout bought a 50.01 per cent stake in the French airline, AOM, in 1999. In addition, Taitbout owns 17 per cent of Air Littoral.


2 Air Liberté operates a fleet of three DC10s, used on routes to the French Caribbean and Réunion, ten MD83s and 11 Fokker 100s, used on its French domestic network from Paris Orly, and some 20 smaller aircraft, mainly used on French regional routes. It employs 2,500 people.


3 In the year to March 31, 1999, the latest period for which audited figures are available, the consolidated turnover of Participations Aéronautiques was FFr 3,634 million. The group’s operating loss was FFr 394 million, leading to a loss before tax (and before exceptional items) of FFr 457 million. At March 31, 1999, net indebtedness to third parties was FFr 1,167 million. The group had negative shareholders’ funds of FFr 1,022 million. In the year to March 31, 2000, consolidated turnover for the group was approximately FFr 3.8 billion.


4 The sale of British Airways’ interests in Participations Aéronautiques will be earnings enhancing in the year to March 31, 2001, ignoring the non-cash effect described below, as operating losses from April 1, 2000, will be avoided. The disposal will, however, result in a one-off, non-cash charge of approximately £56 million to British Airways’ profit and loss account in the year to March 31, 2001, as a result of, inter alia, goodwill previously set off against reserves being charged to profit.


5 The remaining 14 per cent of Participations Aéronautiques is owned by Groupe Bolloré, formerly Groupe Rivaud.


6 British Airways bought a 49.9 per cent stake in France’s TAT European Airlines in January 1993 for £17.25 million, and acquired the remaining 50.1 per cent in August 1996 for £21 million. It took ownership of Air Liberté in January 1997, with Groupe Rivaud, investing £60 million, and merged TAT into Air Liberté in April 1997.


7 The exchange rate used in this statement is £1 = FFr 11.49.


——-