Restructure could see Esken lose control of Southend Airport

The company formerly known as Stobart Group could give up control of London’s least-busy commercial airport, it emerged on Monday, as part of a possible restructuring with creditors.

Esken, the owner of London Southend Airport, said it was contemplating a deal aimed at securing the Essex airport's future while potentially relinquishing its majority stake.

The proposed agreement would involve a restructuring plan negotiated with creditors Carlyle and Cyrus Capital Partners, which would see Esken's ownership stake diminishing to below 50%.

According to the Evening Standard, Esken agreed a £200m convertible loan with Carlyle in 2021, which could translate into a 30% equity stake if payment was not met.

Following alleged breaches of loan terms last year, Carlyle demanded immediate repayment of the full £200m.

Now, a "recapitalisation proposal" had been discussed between the parties, but Esken would need to decide whether to accept it voluntarily or challenge it legally.

Esken said it was "urgently reviewing and assessing" the proposal's terms and potential financial implications for the company and its stakeholders.

It said it needed to reach a consensual agreement, adding that contingency planning, including exploring alternative funding options to address liquidity needs, was underway.

The company warned that a potential restructuring, either voluntary or court-imposed, could significantly impact the group.

London Southend Airport’s chief executive officer John Upton saw the proposed deal positively, however, calling it "great news".

Operations at Southend, from which easyJet flies to eight destinations, were continuing as normal.

At 1316 GMT, shares in Esken were down 45.39% at 0.22p.

Reporting by Josh White for Sharecast.com.