London Southend airport operator Stobart Group has disclosed that it has been negotiating sale of a minority share in the airport, but that discussions have been suspended as a result of the coronavirus uncertainty.
The discussions had signalled a value for the airport of £700-800 million, says the company, referring to suggestions that a 25% stake was on offer.
“No acceptable terms have been agreed and discussions have since been put on hold while both parties navigate the [coronavirus] outbreak,” it adds.
Stobart Group says the airport will be affected by significant route cancellations and adds that the company is likely to need additional liquidity.
“The group is actively reviewing the most appropriate sources of funds to cover the period during which the airport is affected by [the outbreak],” it says, adding that it has taken measures to conserve cash and reduce its cost base.
Stobart cannot estimate passenger numbers for the 2020-21 fiscal year. It says the figures for the year ending 29 February 2020 reached 2.1 million, up 43%.
The company is also discussing management of guarantees and potential lease obligations following the collapse of UK regional operator Flybe. Stobart Group is a shareholder in Flybe parent Connect Airways.
“It is impossible to say what structural changes will occur to the aviation industry in the coming months,” says chief executive Warwick Brady. “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.”