19 February 2024 , 14:06
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Esken, the owner of Southend Airport, is considering a deal that could see it lose control of the airport.
This comes as part of a settlement with a US private equity firm over a loan dispute. Esken, previously known as Stobart Group, borrowed £125 million from Carlyle during the Covid pandemic in 2021 to secure its finances.
However, Carlyle claimed that Esken had broken the terms of its loan and demanded £200 million back in a court case filed last year. On Monday, Esken announced that it had "negotiated a recapitalisation proposal with Carlyle", which would serve "as a solution to the dispute."
Esken now has until March 4 to decide whether it wants to accept the solution. Esken's share in London Southend Airport Company Limited (LSA) could be "significantly reduced to a minority interest" if the deal goes through. However, it would also include funds to keep the airport running.
"Funding of the proposal agreed with the board of LSA includes support from both (Carlyle) and (Cyrus Capital Partners) to secure the future of the airport," the company announced.
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"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," Esken stated.
"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."
Shares had fallen by about 43% around midday on Monday.