Southend airport owners, Esken, to get £20 million loan from CGI, to keep it going
Southend Airport is to get a £20 million cash injection (over 3 years) to boost its recovery from the Covid pandemic. Airport owner, Esken, has agreed a loan with US private equity firm Carlyle Global Infrastructure (CGI) – which will lend £120 million to Esken, which can be converted into a 30% stake in the airport. They hope it will help the airport survive, and attract low cost airlines for holiday flights. Only 147,000 passengers flew through the airport in the financial year end February 28 – compared to 2.1 million the year before. Of these 147,000 passengers, 68,000 flew in March 2020 before travel restrictions took hold – so only about 78,000 used the airport since March 2020.
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Southend Airport to receive £20m cash to boost Covid recovery
3rd July 2021
By Robbie Bryson (Echo)
SOUTHEND Airport is set to receive a £20 million cash injection (over 3 years) to boost its recovery from the Covid pandemic.
Esken, which owns the airport, has agreed a loan with US private equity firm Carlyle.
It will see Carlyle Global Infrastructure (CGI) lend £120 million to Esken, which can be converted into a 30% stake in the airport.
£20 million of this cash has been ring-fenced for Southend Airport over three years.
Esken believe the deal will appeal to cost conscious airlines as the aviation sector recovers from the pandemic.
David Shearer, executive chairman of Esken, said: “CGI represents a true strategic development partner that will enable us to realise the full potential of LSA. [aka Southend airport]
“Carlyle is a global investment firm with $260 billion under management.
“The combination of the proven operational capability of the LSA management along with the airport development experience of CGI and its financial strength will provide a strong platform as we rebuild our commercial relationships with our airline and other partners into the recovery.
“We aim to work closely together to develop a truly exciting London airport proposition.
“This transaction is structured to release £20 million of funding into LSA to support its recovery and development while providing £100 million of liquidity to the rest of Esken.
“We also intend to finalise a new £20 million working capital facility and undertake a documented equity raise of around £40 million.
“When complete these actions will allow us to emerge from the pandemic positioned strongly for recovery.”
Lockdown restrictions curtailed most flights from Southend Airport during 2020 and so far in 2021.
According to the firm 147,000 passengers flew through the airport in the financial year end February 28 – compared to 2.1 million the year before.
Of these 147,000 passengers, 68,000 flew in March 2020 before travel restrictions took hold.
Esken said it does not expect passenger numbers to get back towards normal levels until much later in 2021.
To deal with cash burn problem at the airport, the furlough scheme was utilised.
Richard Hoskins, managing director of Carlyle Global Infrastructure, said: “We are delighted to partner with Esken Limited to support their vision for London Southend Airport.
“As one of London’s favourite airports, London Southend is attractive for airlines due to its cost-efficient operations base as well as to passengers for the experience and convenience.
“We look forward to working with Esken and the team at London Southend to realise the airport’s full potential.”
https://www.echo-news.co.uk/news/19417804.southend-airport-receive-20m-cash-boost-covid-recovery/
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