Carlyle Group Secures Major Stake in London Southend Airport Amid Esken Recapitalization
The Carlyle Group, a prominent U.S. private equity firm, is set to acquire a controlling interest in London Southend Airport (SEN), following a comprehensive recapitalization agreement with the airport’s current owner, Esken. This strategic move will see Carlyle Global Infrastructure Fund converting a £193.75 million ($246.97 million) convertible loan to Esken into an 82.5% ownership stake in SEN, leaving Esken with a 17.5% interest.
This development comes as part of Esken’s broader restructuring efforts, accompanied by an announcement to the London Stock Exchange indicating a shift towards a court-monitored restructuring process and the delisting of its shares. Esken has cautioned that the expected return for shareholders by the end of this restructuring could be minimal, highlighting the significant impact of this transaction on the company’s financial and operational future.
The agreement also outlines an immediate provision of £5 million in short-term bridge funding to SEN, which is part of a larger £32 million new funding commitment aimed at securing the airport’s growth prospects. This financial injection is critical for sustaining SEN’s operations and development in the near term, ensuring its stability during the restructuring period.
Esken has expressed optimism about the restructuring process, despite anticipating several months to reach completion. The company has promised further updates once the restructuring plan is finalized, ensuring transparency regarding the process and its timeline.
The CEO of SEN, John Upton, has lauded the recapitalization proposal, emphasizing Carlyle’s extensive aviation industry experience and the positive implications for the airport’s stakeholders. Additionally, Cyrus Capital Partners is set to provide liquidity to Esken during this transition, further supporting the group’s working capital needs.
Upton also highlighted London Southend Airport’s strategic advantage, noting its accessibility to a rapidly growing population and its capacity to accommodate airlines seeking to expand their London operations. This is particularly significant as other London airports approach their capacity limits.
Both Carlyle and Cyrus have underscored the transaction’s role in securing London Southend Airport’s long-term future, benefiting all stakeholders involved. This move not only solidifies SEN’s financial foundation but also positions it for sustained growth and success in the competitive London aviation market.