FL Group säljer Sterling

FL Group acquired Sterling in October 2005 when the company had recently merged with Maersk Air and in this year FL Group has operated the airline and orchestrated a substantial turnaround of its operations.

The sale of Sterling into the larger leisure group Northern Travel is a logical step to increase the value of Sterling.

The consideration will be paid with ISK 6 billion in cash (DKK 470 million, EUR 63 million) and with ISK 14 billion (DKK 1,095 million, EUR 150 million) in the form of a three year shareholder loan. In addition to this, Northern Travel will over the next twelve months resolve all operating relations to FL Group including operating loans, guarantees provided by FL Group etc.

The sale of Sterling has minimal impact on FL Group’s profit and loss account and equity position. Following the sale Sterling will no longer form part of FL Group’s consolidated accounts. This transaction cancels the earn-out agreement in the original acquisition agreement between FL Group and Fons. Despite this, FL Group receives a similar cash consideration from the transaction.

Northern Travel’s shareholders are Fons (44%), FL Group (34%) and Sund (22%). The company is funded with a mixture of debt and equity, including ISK 11.5 billion (DKK 900 million, EUR 121 million) in equity.

Through its shareholder base Northern Travel has a strong financial backup and considerable investment capacity for further reorganising the Scandinavian travel industry.

The new company will be market leading, combining Scandinavia’s largest low cost carrier with Scandinavia’s largest retailer in the travel industry.

Along with the acquisition of Sterling Airlines, Northern Travel is acquiring all of the shares in Iceland Express, 51% of shares in Astraeus, all of the shares in Hekla Travel and approximately 30% of outstanding shares in Ticket. The turnover of the companies forming Northern Travel will be around ISK 120 billion (DKK 10 billion, EUR 1,260 million) and the number of passengers flown around 7.5 million.

Hannes Smárason, FL Group’s CEO commented:

“The formation of Northern Travel is a very exciting project that we believe will be a major force within the travel and tourism industry in the Nordic area. With the sale of Sterling into this company we believe we will be better positioned to benefit from the opportunities that exist within the Nordic market. Its mix of companies covers every niche of the travel market and is therefore extremely well equipped to market its products to customers, young and old, business or pleasure. Increased cooperation between the Northern Travel companies offers unique opportunities to travellers where low prices and quality travel will be the key.

The sale of Sterling is at the same time an important milestone in the development of FL Group. We are now selling off the last 100% owned operating company within the airline sector. Our exposure to the sector is currently both through private and public holdings. We are also happy to deliver Sterling to its new owners in the best shape the company has ever been in and would like to thank Sterling’s management and staff for their excellent work over the last 12 months..”

Pálmi Haraldsson, Chairman of Northern Travel Holding commented:

“Northern Travel offers great potential. We believe that this unique combination of assets will have a great effect on the Nordic travel and tourism market. The company is heavily represented in all the Nordic countries and intends to increase its representation through various means. All of the companies will continue to be operated in current form and no change in staff is planned. The shareholders of Northern Travel all want to expand the businesses of the underlying companies and tighten their cooperation. The goal of the owners is to make northern Travel a profitable, inventive and forward looking entity. “

Further information:
Hannes Smarason,
CEO of FL Group
Tel.: +354 591 4400
Martin Niclasen
Managing Director FL Group Nordic
Tel.: +45 2149 2099
Pálmi Haraldsson,
Chairman of Northern Travel Holding
Tel.: +354 692 2222 (after 12:00 GMT)