A deal to sell a 30% stake in Southend airport for £120 million to a US private equity firm has been confirmed by owner Esken.
The company, formally known as Stobart Group, was responding to speculation over a potential strategic partnership for the Essex airport.
A statement was issued after Stobart Air, which operated as a franchise carrier running Aer Lingus regional routes, called in liquidators late on Friday after a sale of the airline fell through.
Esken said: “The group confirms that it is in the final stages of agreeing the documentation with Carlyle Global Infrastructure Opportunity Fund with regards to a long term strategic funding transaction relating to the development of LSA [London Southend Airport].
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“Under the proposed terms of the partnership, Carlyle would provide £120 million of funding net of Carlyle costs via a loan – convertible at Carlyle’s option into an equity stake of 29.99% in LSA – which would release £100 million of liquidity into the rest of the group.”
The announcement came after a trading statement earlier on Monday where the aviation and energy infrastructure group disclosed that the impact of the pandemic had been “both greater and over a longer period” than thought at the time of a capital raising in June 2020.
Esken described Southend airport as a “prime asset” which served more than 40 destinations prior to the pandemic.
The company added: “Over the last nine months Esken has been in discussions with a strategic financial partner in relation to the development of LSA as aviation recovers from the pandemic.
“This partner has significant investment experience in the airport sector globally and will deploy its resources alongside the operational management team at LSA through the Covid-19 recovery phase and future development of the airport.
“Esken is now in the final stages of agreeing the documentation for a strategic funding transaction into LSA which would release significant liquidity into the group while underpinning the funding requirement of the airport in the medium term.”
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