Home Estate Planning London Southend Airport moots deal to secure future amid loan spat with Carlyle

London Southend Airport moots deal to secure future amid loan spat with Carlyle

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London Southend Airport owner Esken is mooting a deal to secure the embattled hub’s future and resolve ongoing funding dispute with Carlyle Group.

Under the new arrangement, the aviation and infrastructure group would significantly reduce its stake to a minority interest, while the Essex hub would commit to apply for restructuring proceedings.

Esken and the US private equity giant Carlyle have been embroiled in a High Court spat for months over a £193.75m convertible loan extended in 2021.

Carlyle say Esken have breached a number of financial covenants in the agreement since November last year, meaning it should be paid years ahead of schedule, in February.

In a statement, Esken said it was “urgently reviewing and assessing the terms and potential financial impact of the recapitalisation proposal on the company and its wider stakeholders.” The new deal has been negotiated with both Carlyle and Cyrus Capital Partners.

“There can be no certainty that any of these discussions will lead to a consensual agreement, but Esken believes that a consensual outcome would be in the interests of all parties and will take all reasonable steps to facilitate such an outcome.”

It added: “The company is also undertaking contingency planning, including exploring access to alternative funding to cover its liquidity needs. The recapitalisation proposal, if agreed to by the Company or imposed on it by the courts, could have a material adverse impact on the group.”

Esken shares crashed over 47 per cent this morning, following the announcement.

The firm bought the airport in 2008 for £21m, when it was known as Stobart Group. However since then a number of airlines have pulled their operations, including Easyjet, Ryanair and Wizz Air. Easyjet returned to the Essex hub in 2023.

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