Carlyle, a United States private equity firm, will become the latest foreign corporation to acquire a company in the United Kingdom with the acquisition of Southend Airport after a debt settlement deal.
In 2021, Esken borrowed £125 million ($159 million) from Carlyle to weather the financial storm caused by the pandemic, which was still affecting travel. According to The Guardian, Carlyle later demanded money back from Esken, claiming the latter had violated the conditions of the loan. That case will be closed with this deal.
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Settlement Agreement
The UK aviation company Esken confirmed in a press release that it had settled the £193.75 million ($246.55 million) debt that its London Southend airport subsidiary had with Carlyle.
The agreement calls for Carlyle to acquire 82.5% ownership of the airport in Essex, with Esken retaining 17.5%. The procedure will delist Esken's shares from the London Stock Exchange, leaving stockholders with nothing.
As part of the agreement reached with the airport board, the hub will receive £32 million ($40 million) in new finance to ensure its future expansion. This includes a short-term £5 million ($6.4 million) unsecured bridging loan.
According to Esken, the company chose to reorganize because it did not have the capital to endure a drawn-out legal dispute. A legal procedure will be necessary for the said reorganization.
The company stated: "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."
Cyrus Capital Partners, a London-based private equity business, is also involved in the sale. They have a £53 million ($67 million) bond due on May 8 and will provide Esken with liquidity while this is happening.
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