Carlisle-based aviation, energy and civil engineering firm Stobart Group said on Tuesday its talks to sell a 25% stake in London Southend Airport have been put on hold “while both parties navigate the current COVID-19 outbreak.”
News reports suggested the interested party is Germany-based AviAlliance GmbH, which is owned by Canadian pension investor PSP Investments and has shareholdings in the airports of Athens, Budapest, Düsseldorf, Hamburg and San Juan (Puerto Rico).
The news came as Stobart Group also published a trading update for the year to February 29, 2020, in which it warned it requires additional liquidity.
“Given the current market conditions, additional liquidity is likely to be required and the group is actively reviewing the most appropriate sources of funds to cover the period during which the airport is affected by the COVID-19 virus,” said Stobart Group.
“In addition, the group has moved swiftly to take measures to conserve cash and reduce its cost base in order to provide further resilience through this period …”
Confirming the Southend Airport speculation, Stobart Group said: “Stobart Group … notes the recent press speculation regarding a potential sale of 25% of London Southend Airport.
“The group confirms that it has been in detailed discussions for several months regarding an initial minority investment from a potential strategic airport development partner that has indicated a headline value for London Southend Airport of between £700-800m.
“No acceptable terms have been agreed and discussions have since been put on hold while both parties navigate the current COVID-19 outbreak.”
On the trading update, Stobart Group CEO Warwick Brady said: “Despite the current challenges presented by the COVID-19 virus, we continue to own and operate aviation and energy assets with significant underlying value.
“It is impossible to say what structural changes will occur to the aviation industry in the coming months.
“However, ultimately the current crisis will pass, and people will continue to want to fly in and out of one of the world’s largest travel markets.
“Similarly, Stobart Energy is well placed to generate higher margins going forward.
“The capital expenditure programme has been completed, we have a robust supply chain in place, long term valuable contracts, and our renewable energy plant customers are operating more consistently.
“We therefore continue to believe there are significant medium and long-term opportunities to further increase the value of our assets.”