Close Brothers Private Equity, ("CBPE") together with the minority shareholders of Aurigny Anglo Group Ltd, have sold Aurigny Air Services, "the Channel Islands Airline", and its associated engineering business to the States of Guernsey for £5 million.

Aurigny Anglo Group which turned over £25m in 2002 is the main operator of inter-island services around the Channel Islands and also operates regional services from Guernsey to Stanstead, Manchester, East Midlands and Bristol airports. It is shortly to take over the operation of the Guernsey Gatwick route from British Airways.

CBPE originally backed the management buyout/buy-in of Aurigny in May 2000, planning to use the business as a platform to develop wet leasing activities and the regional routes. Regrettably, September 11 intervened and forced the business to rein in its expansion plans and focus on its core activities. Recently, the business has been enjoying much success in moving its sales channel online with the creation of Aurigny.com.

The States of Guernsey approved the completion of the purchase in an emergency sitting of the States of Deliberation on Wednesday, 14 May and completed the transaction shortly thereafter.

Richard Lott of CBPE said:

"The States of Guernsey have acquired Aurigny for strategic reasons. By owning the airline, they have secured effective control over key lifeline air services on which the Channel Islands and their finance industry depends. The States plan to operate the business totally independently and Malcolm Hart and his team will continue to manage the business.

Whilst Aurigny has not been able to deliver the ambitious plans set out at the start of our investment, it has moved forward substantially under our stewardship. I hope this is a real win: win deal for everyone - a sensible profit on our investment for us and a strategic "insurance policy for the Islands".

Ozannes of St Peter Port, Guernsey were the legal advisors to CBPE.

Enquiries:

Richard Lott – Close Brothers Private Equity
Tel: 020 7426 4000

This press release has been issued by Close Brothers Private Equity.