The owner of London Southend Airport agreed to a debt restructuring proposed by the airport and creditors Carlyle Group and Cyrus Capital Partners.
Aviation group Esken Ltd has accepted the plan, which envisages Carlyle converting a £194 million ($245 million) loan extended to the airport into a 82.5% equity stake, according to a filing by the firm on Wednesday. Esken will also face a restructuring of its own: Cyrus will swap a bond it owns into equity, with Esken’s shares delisted in London.
As part of the proposal, London Southend will be provided with an initial £5 million of short-term funding until the restructuring plan is concluded. Overall, £32 million of new money has been committed to ensure the future of the airport in Essex, to the east of the capital.
Esken, after its takeover by Cyrus, will continue to hold a 17.5% stake in London Southend. Cyrus will provide Esken funding to meet working capital needs and to allow a gradual wind down of the remaining group.
Esken isn’t exploring alternative options, it said in the statement. A representative for Carlyle and Cyrus said that the new funding ensures the airport’s long-term future and that they are looking forward to working with London Southend’s management team.
“While there could have been the opportunity to pursue other sources of finance given more time, Esken did not have access to the financial resources to sustain it through what would have involved a protracted court battle,” Esken said.
Implementing Esken’s restructuring plan will require a court process likely to take several months, it added.
