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Vulture fund swoops for stake in Southend Airport-owner Esken

Written by on 24/03/2021

A prominent US-based investor in distressed corporate debt has swooped to buy a stake in the owner of Southend Airport, amid continuing doubts about the speed of the aviation sector’s likely recovery.

Sky News has learnt that Strategic Value Partners (SVPGlobal), which is run by Victor Khosla, approached several of the biggest investors in Esken on Wednesday about acquiring their shares.

Market sources said the vulture fund had bought part of the stake in Esken held by Invesco, one of the company’s biggest shareholders.

Logo of Esken (formerly known as Stobart)
Image: Esken was formerly called Stobart group Pic: Esken

One insider said the stake bought by SVPGlobal was “not at a disclosable level”, while Invesco declined to comment.

It was unclear whether the purchase was intended to be the precursor to a bigger corporate move by SVPGlobal, which is best-known in the UK for having turned around the performance of the London-based waste incineration group Cory Riverside Energy.

In October, Mr Khosla launched a $1.6bn Dislocation Fund, part of which has already been deployed in the restructuring of Swissport, the airport baggage-handler.

“The market dislocation has created a once-in-a-decade opportunity and substantially expanded the range of compelling distressed debt investments,” he said at the time.

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“We are pleased to receive the backing of a number of both existing and new large investors in this custom mandate, which will take a hybrid approach, with a mix of investments ranging from more tactical trades through to taking control of and supporting companies that have sound underlying businesses but overleveraged balance sheets.”

SVPGlobal declined to comment on its interest in Esken or whether its stake had been acquired through the Dislocation Fund.

A Flybe plane takes off from Manchester Airport
Image: Stobart Group had an unhappy spell as a shareholder in Flybe

Esken, which was previously called Stobart Group, is the UK’s largest provider of biomass fuel alongside its aviation interests.

Coincidentally, Esken confirmed last month that Warwick Brady, its chief executive, was quitting to run Swissport.

Mr Brady’s resignation came just eight months after Esken tapped investors for £100m of new equity in an attempt to restore the fortunes of its aviation business.

Esken has plummeted in value during Mr Brady’s tenure, having at one point been valued at £1bn.

On Wednesday, its shares closed at 33.9p, giving it a market capitalisation of just over £200m.

His four-and-a-half years at the helm included a sorry episode in which the company was engulfed in a bitter legal battle with its former chief, Andrew Tinkler.

Stobart Group also had an unhappy spell as a shareholder in Flybe, which collapsed into insolvency last spring.

Esken could not be reached for comment.

 Sky News

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