Southend airport is to pass into the control of the US private-equity group Carlyle after an agreement to settle a debt, in the latest takeover of a UK firm by a foreign company.
The London-listed aviation group Esken, formerly Stobart Group, said it had reached a deal over the £193.75m debt that its subsidiary London Southend airport owed to Carlyle Global Infrastructure Fund (CGI).
Under the deal, CGI will take an 82.5% stake in the Essex-based airport, while Esken will keep a 17.5% stake. Esken’s shares will be delisted from the London Stock Exchange as part of the process, and shareholders will be left empty-handed.
“The expectation is that any return for shareholders at the end of the process is likely to be negligible,” Esken said in a statement to the London Stock Exchange.
The deal, agreed with the board of the airport, includes a short-term unsecured £5m bridge loan to the hub as part of a commitment of £32m of new funding to secure its future growth.
Esken said it had opted for the restructuring because it lacked the financial resources to fight a protracted court battle. The restructuring will require a court process.
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 London Southend airport is secure and the board will progress the orderly wind down of the remaining group.”
The deal also involves Cyrus Capital Partners, a London-based private-equity firm, which holds a £53m bond that matures on 8 May, and will provide liquidity to the Esken group during this process.
The airport’s chief executive, John Upton, previously said Carlyle and Cyrus had “extensive experience across the aviation industry and deep knowledge of our airport”.
The news comes a day after the UK telecoms firm Spirent Communications accepted a £1bn offer from a US rival, Arizona-based Viavi Solutions.
There has been a flurry of takeover offers for British companies from foreign suitors hoping to take advantage of low valuations. UK assets are considered to be cheap, weighed down by a weaker pound, the struggling economy and lingering impact of Brexit.
Southend was redeveloped with soaring ambition a decade ago, and appeared likely to grow exponentially among airports that service London, as airlines including easyJet and Ryanair established bases there. But then the Covid-19 outbreak brought international travel to an abrupt halt in 2020.
In 2021, as the pandemic continued to weigh on travel, the company borrowed £125m from Carlyle to secure its finances through the crisis. Carlyle later claimed Esken had broken the terms of its loan and asked for £200m back. The latest deal will settle that dispute.
