Rubicon eyes Fly540 buy, details EasyGroup LCC venture

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Investment firm Rubicon Diversified is looking to acquire African regional carrier Fly540 from Lonrho as it progresses with plans to launch a new low-cost airline in Africa in conjunction with EasyJet founder Stelios Haji-Ioannou's EasyGroup business.

Rubicon said today that it is "in discussions regarding the potential acquisition of Fly540" from Lonrho, which is a shareholder in Rubicon. Any transaction between the two companies would count as a "reverse takeover" under AIM rules.

"The company is not currently in a position to comply with the requirements of AIM Rule 14 insofar as publication of an admission document and convening of a general meeting are concerned," said Rubicon.

"Consequently, the company has requested that its securities are suspended from trading on AIM until such time as either the company is able to publish an admission document or the potential transaction is no longer in contemplation."

Lonrho has established Fly540 in several regional centres across Africa.

Rubicon has also provided an update on the low-cost carrier it is planning to launch with EasyGroup.

The airline will likely be based in West Africa, "where there appears to be high demand for a low-cost carrier servicing both domestic and international destinations within Africa", it said.

Rubicon announced in December that it had entered into a conditional agreement with EasyGroup to examine the feasibility of launching a low-cost carrier in Africa, using the Fastjet.com brand.

"The EasyGroup team, led by Sir Stelios Haji-Ioannou, has worked intensively with Rubicon since commencement of the project on all aspects of airline operations, and preliminary recommendations have been made regarding location of hubs, route networks and frequencies, and other associated matters relating to launching of new service," said Rubicon, adding that it is "holding discussions with various aircraft manufacturers to determine the final choice of aircraft model, availability and financing structures".

The group's chairman, Robert Burnham, added: "What we are doing is complex, and while we have no doubt about the hard work which lies ahead, we are confident that we are on track to deliver against our strategy."