Southend-2
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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.
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.
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Whilst revenue at SEN is obviously well down it is not zero. Revenue is being earned from landing and parking fees for ASL and JOTA and for the storage of aircraft.
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Stobart Group have set out in detail this morning the full financial impact of taking Stobart Air and the leasing company back in house. The costs are substantially more than previously reported however the aim remains the same - to control the liabilities falling on Stobart Group due to the sale and leaseback deal of the ATRs.
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Indeed so.
"The Board has concluded that the best course of action financially for the Company and its shareholders is for it to buy back Stobart Air and Propius. This action will give Stobart Group effective control over the pre-existing obligations it has in respect of those businesses. The intention is that Stobart Group will continue its current positive dialogue with Aer Lingus to conclude a long-term franchise extension and ensure that the businesses are put on a sound financial footing.
Stobart Group's Aviation Strategy has not changed as a result of this transaction and the Company will work with Aer Lingus to identify a new financial partner to support the business for the future with Stobart Group exiting its involvement in a controlled way at the appropriate time.
Terms of the Transaction
The consideration for the Transaction is a payment of up to GBP8.55 million on the following basis:
-- An initial consideration of GBP300,000 payable in cash at completion;
-- A deferred consideration of GBP2 million to be paid no later than 15 December 2020.
-- A contingent deferred consideration up to a maximum of GBP6.25 million based on the equity value achieved (after disposal costs) on a realisation of value in respect of one or both of the businesses by Stobart Group prior to 31 December 2023"
"The Board has concluded that the best course of action financially for the Company and its shareholders is for it to buy back Stobart Air and Propius. This action will give Stobart Group effective control over the pre-existing obligations it has in respect of those businesses. The intention is that Stobart Group will continue its current positive dialogue with Aer Lingus to conclude a long-term franchise extension and ensure that the businesses are put on a sound financial footing.
Stobart Group's Aviation Strategy has not changed as a result of this transaction and the Company will work with Aer Lingus to identify a new financial partner to support the business for the future with Stobart Group exiting its involvement in a controlled way at the appropriate time.
Terms of the Transaction
The consideration for the Transaction is a payment of up to GBP8.55 million on the following basis:
-- An initial consideration of GBP300,000 payable in cash at completion;
-- A deferred consideration of GBP2 million to be paid no later than 15 December 2020.
-- A contingent deferred consideration up to a maximum of GBP6.25 million based on the equity value achieved (after disposal costs) on a realisation of value in respect of one or both of the businesses by Stobart Group prior to 31 December 2023"
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[QUOTE=Barling Magna;10764881]Indeed so.
If I might just add the following from the report to the Stock Exchange which is vitally important in understanding the cash drain on the Group.
"Stobart Group expects to fund the operations of Stobart Air and Propius over the period through to achieving positive cash flow. The businesses have actively sought to reduce their cash requirements during the COVID-19 period and Stobart Group expects to fund in the order of €25 million (£21.88 million) over the next 12 months, including the lease payments referred to below."
If I might just add the following from the report to the Stock Exchange which is vitally important in understanding the cash drain on the Group.
"Stobart Group expects to fund the operations of Stobart Air and Propius over the period through to achieving positive cash flow. The businesses have actively sought to reduce their cash requirements during the COVID-19 period and Stobart Group expects to fund in the order of €25 million (£21.88 million) over the next 12 months, including the lease payments referred to below."
Ryanair seem to have suspended sales of flights from Southend to Bergamo, Brest and Rodez. All other routes appear to remain on sale. One might conclude these routes are being cancelled
Anyone able to confirm ?
Anyone able to confirm ?
This may help:https://www.routesonline.com/news/38...as-of-16may20/
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Chance to support a good cause and one lucky person will get to visit the tower.
https://www.echo-news.co.uk/news/184...-empty-runway/
https://www.echo-news.co.uk/news/184...-empty-runway/
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Name change coming
The Stobart Group have sold the right to use the name Stobart back to Eddie Stobart Limited. Going forward this will have zero impact on the airport, other than a rebranding of the ground support equipment, but will require the newly acquired airline to change its name. I wonder if they will revert to Aer Arran?
The Stobart Group have sold the right to use the name Stobart back to Eddie Stobart Limited. Going forward this will have zero impact on the airport, other than a rebranding of the ground support equipment, but will require the newly acquired airline to change its name. I wonder if they will revert to Aer Arran?
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For what it’s worth the CAA stats are out for April and show SEN handled 141 pax. 94 for Bucharest (assume most outbound) and 47 for Derry (average 3.36 pax per flight).
Combined SEN and STN passenger numbers (moved to STN around 9th April) on the Derry route were just 166 in April!