Shareholders of Flybe are being urged to accept a cut-price sale of the airline - or the parent company will be wound up.

Flybe announced last month that it had reached a sale agreement with Connect Airways - a consortium of Virgin Atlantic, Stobart Air and an investment firm - for the sale of the airline for £2.2m.

The deal, working out at just 1p a share deal, came at a huge discount to the airline’s prevailing share price.

Flybe’s biggest shareholder attempted to block the cut-price sale, which was subsequently revised to £2.8m.

That sale of the operating companies is expected to be competed by 22 February, and does not require shareholder approval.

But the scheme of arrangement will require approval at a meeting of the shareholders of the parent company Flybe plc in London on March 4.

But in a letter to shareholders, the company admitted the offer was ’disappointingly low’ but the only one able to be brought about immediately to allow Flybe and its subsidiaries to trade as going concerns.

And it warned: ’If the scheme is not approved, the directors intend to take steps to wind-up the company and shareholders are likely to receive no value for their shares in Flybe.

’Accordingly, the directors believe that the terms of the acquisition remain in the best interests of shareholders as a whole and unanimously recommend that shareholders vote in favour of the resolutions to be proposed at the court meeting and the general meeting.’

To avoid a cashflow issue, and the company going into administration, the initial sale deal was amended on January 15 with a subsidiary sale agreement.

The consortium would now pay £2.8m to take control of the main trading company Flybe and the online arm Flybe.com while later completing the purchase of the wider holding company and offer a revised bridging loan of up to £20m, with £10m released immediately.

Flybe, which provides lifeline routes to Liverpool, Manchester as well as Birmingham, has reassured passengers they can continue to book flights.

And it said it will re-open a base in the Isle of Man as planned from April 1.

In a statement, Flybe said the sale of the operating businesses Flybe Ltd and Flybe.com Ltd to Connect Airways was separate to the takeover offer being made by Connect Airways for the listed holding company, Flybe Group plc.

It said: ’It is important to stress that once the sale of the operating businesses to Connect Airways has been completed, any winding-up of PLC will have no impact on Flybe operations and its employees.

’The sale of the operating businesses, Flybe Limited and Flybe.com Limited, is continuing as planned and is expected to complete by February 22, well before the unrelated separate shareholder vote on the PLC takeover offer.

’If the takeover scheme for Flybe Group plc is not approved by shareholders, shareholders are expected to receive no value for their shares and the board intends to take the necessary steps to wind up the PLC.’