Originally Posted by
Buster the Bear
Where has the cash come from?
A quick look at the November figures (latest available accounting snapshot) suggests that the owners of the airport had £7m in cash and were burning through a little over £1m in cash monthly. We can assume that today they have zero cash. They do however have a big financing facility that is partly drawdown and the headroom on that in November was £29m. We know they had to put cash into Flybe via Connect to the tune of £9m so remaining credit facility will now be £20m or less. Revenue is now zero at the airport and a mild winter most probably didn't help their energy business generate much revenue.
Buying back the aircraft leasing business and Stobart Air is reported to be costing well below £1m. But with it comes annual aircraft leasing costs of £14m. So the headroom in the credit facility is now spoken for this year.
Adding to their woes is the performance of (or lack thereof) the Eddie Stobart shares. The airport owners have a large investment still in the trucking business and mortgaged their shares in it to raise circa £50m in cash, which has all been spent. In November they valued the shares at 64p each. They are in fact worth 8p each putting a huge £24.5m dent in the Stobart Group balance sheet.
It's time for a White Knight. There are 2 current shareholders who could play a pivotal role in digging the airport owners out of their debt hole. Tosca Fund has slowly been increasing their shareholding to become the largest shareholder and they now own nearly 19% of the company. They invest in regional property and if they see a future for the airport they might want to extend a helping hand during these troubled times. The other less likely saviour is Cyrus Capital Partners who funded the Connect Airways disaster and bought a sizeable minority chunk of Stobart Group.
The next 6 months will be very interesting for the owners of Southend Airport.