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Esken agrees sale of Stobart Air and Carlisle Airport

“The sale of the airline presents a significantly better financial outcome than that resulting from a closure”

Esken Ltd -
Esken will regroup around Southend Airport

Esken Limited (LON:ESKN) agreed the sale of Stobart Air and Carlisle Airport to Isle of Man-based private investment firm Ettyl.

Stobart Air was reacquired from the failed Connect Airways in April last year but has since lost its main contract with Aer Lingus when it expires in December 2022.

Esken said the sale of Carlisle Airport will also allow it to focus solely on Southend Airport, the hub of its current operations.

Later on Friday, the company said it had become aware that Ettyl's proposed financing for the transaction "is no longer available and understands that Ettyl is progressing discussions with another potential financing source".

The company said it is investigating these matters and seeking further information, including the impact this may have on the ability of Ettyl to finance the transaction and obtaining the change of control consents, while also talking to its lending banks given banking facility consent for the sale has been obtained.

If the sale does go ahead, Esken said the sale of Stobart Air is expected to result in a loss on disposal of approximately £8mln after professional fees, while it will book a profit of £10mln for the sale of Carlisle Airport.

As part of the deal Esken will take back 100% ownership of Propius, an aircraft leasing company also reacquired from Connect, for £1.

In cash terms, Esken said the impact of the disposals and settling outstanding liabilities would see a maximum outflow of £49mln over the three years to end-February 2024.

A trading update in March said Esken had £77.4mln of cash and undrawn bank facilities available as of February this year.

David Shearer, Esken’s executive chairman, said the sale had been a difficult and protracted process but Stobart Air remains a critical part of connectivity between Ireland and the United Kingdom and he was pleased the future of the business and its 480 staff has been secured under a new owner with ambitions to grow its network of routes.

“The sale of the airline presents a significantly better financial outcome than that resulting from a closure,” he added.

“Our operations at CLDA {Carlisle Airport] were peripheral to the main focus of our Aviation business at London Southend Airport and we have taken this opportunity to tidy up our portfolio of businesses at a fair value."

Following the disposals, Esken will regroup around Southend Airport and Stobart Energy along with the aviation services business, he added.

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Price: 14.58 GBX

Market Cap: £149.49 m

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