06 March 2024 , 08:48
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US private equity giant Carlyle is set to take control of Southend Airport after agreeing a deal to settle a debt with its current owner.
The investor will take an 82.5% stake in London Southend Airport (LSA), while current owner Esken will keep 17.5%. Esken, formerly Stobart Group, said it had decided to agree to the proposal designed to settle the airport's £193.75 million debt to Carlyle Global Infrastructure Fund (CGI).
"The company has agreed to accede to that recapitalisation proposal in relation to LSA," it said in a statement to shareholders on Wednesday. "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. "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," the business said.
Once a rising star among airports which service London, Southend Airport'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 £125 million from Carlyle to secure its finances through the crisis. Carlyle later claimed that Esken had not kept to the terms of its loan and demanded £200 million back.
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The new deal will resolve this issue. Esken hinted at a possible deal last month, stating it had until 4th March to consider it. In 2020, easyJet, one of the airport's biggest customers, announced it would shut its base there. However, the airline has since returned and now operates several flights from Southend.