Flyr AS - Unsuccessful attempt to raise capital, the board of directors to consider alternatives for continued operations

30 Jan 2023 08:00 CET

Reference is made to the stock exchange announcement by Flyr AS (the "Company")
on 10 November 2022 regarding (i) the successfully placed private placement of
25,000,000,000 new shares with a subscription price of NOK 0.01 to raise gross
proceeds of NOK 250 million (the "Private Placement"), (ii) the subsequent
offering of up to NOK 100 million with a subscription price of NOK 0.01, and
(iii) the allocation of independent subscription rights with a subscription
price of NOK 0.01 to participants in the Private Placement and the subsequent
offering to raise up to NOK 350 million (together, the "November Financing
Plan").

In connection with the Private Placement the Company communicated that it was
dependent on raising further capital from the November Financing Plan by the end
of Q1 2023 to pay the Emission Trading System quotas (EU ETS) in April 2023 and
to ramp-up for the coming spring and summer based on the Company's business plan
and market assumptions.

Following completion of the Private Placement the share price of the Company has
traded considerably below the subscription price of the November Financing Plan,
which meant that succeeding with the November Financing Plan became increasingly
unlikely. As such, the Company had to consider alternatives to secure its
financial needs.

The Company's management and board of directors have worked intensively to
achieve a viable long-term solution for the Company's operations, which would
strengthen the business plan of the Company and increase the chances to raise
the necessary liquidity to sustain operations. In cooperation with its financial
advisors, the Company has explored a number of different alternatives, including
increased wet lease operations and other strategic alternatives.

Due to the global shortfall in available aircraft, the Company experienced
stronger than expected demand for wet lease and charter operations. In mid
-December 2022 the Company initiated discussions with a European airline
regarding a wet lease arrangement for the production of 6 aircraft for the
summer season 2023, with commencement at the end of March 2023. A wet lease
agreement for 6 aircrafts with a reputable partner would considerably de-risk
the business case and improve the chances of succeeding with a new financing
plan.

The commercial terms of a wet lease agreement for 6 aircraft with a European
airline was agreed in principle on 23[rd] December 2022, but due to the
uncertainty of the November Financing Plan, signing of the agreement was made
conditional on the Company securing further financing.

The evaluation done by the Company and its financial advisors was that this wet
lease agreement, which would have secured the income and a profitable operation
for 50% of the Company's fleet for the entire period from the end of March to
the end of October 2023, would significantly increase the probability of
successfully implementing a new financing plan to replace the November Financing
Plan that at this point appeared unlikely to succeed.

In order to be ready to perform its obligations under the wet lease agreement
commencing in March 2023, the Company had to reverse some of the liquidity
preserving measures it had planned and implemented, as the wet lease agreement
was considered instrumental in securing the new financing plan that would
address both the short term and long-term funding requirements of the Company.

After discussions with the Company's financial advisors Arctic Securities AS,
Carnegie AS and SpareBank 1 Markets AS (the "Managers") the Company authorised
the Managers to seek to establish an underwriting consortium for a rights issue
to raise up to NOK 330 million, to fulfil the conditions for signing of the wet
lease agreement and replenish the company's cash position.

In spite of the de-risking of the investment case, and the support from several
key shareholders, the Managers have not yet been able to raise the sufficient
market underwriting, even though a rights issue would be expected to take place
at a discount to the theoretical ex-rights share price following the capital
raise. Market conditions and continued uncertainty with regards to airline
travel and earnings through 2023 have deterred investors from committing capital
for the required period of time, in spite of the Company's wet lease
opportunities and improving tickets sale. Underwriting, or the support for a
private placement, has been sought on a confidential basis, since a non
-underwritten share issue would have been insufficiently robust given the
Company's short term financial commitments. Due to the unsuccessful process to
underwrite a rights issue or carry out a private placement, the Company is now
in a critical short term liquidity situation.

The Company and the Board will continue its efforts to explore solutions for the
Company, including exploring whether there are feasible alternatives to secure
continued operations, and will revert with further information as and when
appropriate. There is, however, no guarantee that a solution that would create a
meaningful shareholder value for the current shareholders will be found.

For further information, please contact:

Investor relations

Email: investors@flyr.com

This information is considered to be inside information pursuant to the EU
Market Abuse Regulation and is subject to the disclosure requirements according
to section 5-12 of the Norwegian Securities Trading Act. The information was
prepared by Brede Huser, CEO at Flyr AS, on the time and date provided.

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