Sale of Ireland’s Stobart Air in doubt over financing

Doubt has been cast on the planned sale of Aer Lingus Regional operator Stobart Air (RE, Dublin Int’l) to Ettyl Limited, a little-known start-up virtual carrier based on the Isle of Man, a British tax haven, over financing concerns. In a UK stock exchange filing posted on Friday, May 28, 2021, at 1730L, after markets closed, the current owner, Esken, said that it had “become aware that [buyer] Ettyl’s proposed financing for the transaction is no longer available and understands that Ettyl is progressing discussions with another potential financing source.” It added that it “is investigating these matters and seeking further information, including with regard to the impact this may have on the ability of Ettyl to finance the transaction and obtaining the change of control consents required in order to complete the transaction. Esken is discussing this matter with its lending banks given banking facility consent for the sale has been obtained.” Earlier on the same day, Esken had filed a separate update disclosure on the deal – which Aer Lingus must give its consent to if it is to proceed – saying that “concluding the change of control consents is taking longer than was envisaged at the time of the announcement of the transaction.” In April 2021, aviation and energy infrastructure group Esken, formerly Stobart Group, said it had signed a deal to sell its entire shareholdings in the airline as well as Carlisle airport owner Stobart Air (United Kingdom) to Ettyl, which is headed by young entrepreneur Jason Scales and head of commercial operations Ian Richardson. Scales, who has no direct experience of the aviation business, commented at the time that “Ettyl sees significant opportunities for increased regional connectivity as economies recover from the impacts caused by the pandemic and return to stability across the UK and Ireland.” Stobart Air’s contract to operate Aer Lingus Regional runs until the end of 2022, and Emerald Airlines (Ireland) has been named as the preferred bidder to take over from that date. The final contract with Emerald is expected to be formally signed soon.