London Southend Airport (LSA) is to be taken over by US private equity giant Carlyle after a deal was agreed to settle a debt with its current owner.
The investor will take an 82.5 per cent stake in LSA, while current owner Esken will keep 17.5 per cent.
Carlisle-based Esken, formerly Stobart Group, said it had decided to agree to the proposal designed to settle the airport’s £193.75m debt to Carlyle Global Infrastructure Fund (CGI).
In a statement issued to the London Stock Exchange, Esken said: “The company has agreed to accede to that recapitalisation proposal in relation to LSA.
“This will therefore proceed on a consensual basis, rather than through a contested court process, which could be potentially destructive for all stakeholders.”
Esken will also delist its shares in London and “wind down” the remaining parts of the group.
It added: “The court process for the Esken restructuring plan is likely to take several months to conclude but, in the meantime, the future funding of LSA is secure and the board will progress the orderly wind-down of the remaining group.”
LSA’s future has been uncertain since the Covid-19 pandemic put the brakes on international travel.
In 2021, as the pandemic continued to eat into passenger numbers, the company borrowed £125m from Carlyle to secure its finances through the crisis.
But later Carlyle claimed that Esken had broken the terms of its loan and asked for £200m back. The latest deal will settle that dispute.
Esken had already announced the possibility of a deal last month, saying it had until March 4 to mull it over.
It now remains to be seen whether Southend Airport can turn around its fortunes.
In 2020, one of the airport’s biggest customers, easyJet, said it would close its base there. The airline has since returned and now runs several flights out of Southend.