The owner of Southend Airport is facing a High Court battle with Carlyle Global Infrastructure Fund (CGI) over an alleged breach concerning a convertible loan agreement.

Aviation group, Esken, is attempting to sell Southend Airport and disputes any wrongdoing over the terms of the loan.

In July 2021, Southend Airport and CGI entered into a seven-year convertible loan instrument, with the loan being drawn down in August that year.

Esken is pursuing the sale of the airport with a view to finding the right long-term strategic owner of the airport. This process, which is underway, would see an early redemption of the CGI convertible loan and realise value for Esken shareholders, according to the group’s board.

In a trading update issued on 30 August, the Esken board indicated it has been “encouraged” by the level of initial interest received in relation to the airport. It has suggested the return to pre-pandemic demand throughout the travel sector has led to positive traction in performance, with the outlook for summer 2024 travel looking “strongly positive”.

Esken also highlighted that it has continued to provide liquidity support to Southend Airport and has given a commitment to do so through to its sale. The group’s board believes that its value is above the redemption value of the CGI loan and that it is “in the interests of both CGI and Esken shareholders” to achieve a successful sale of the airport on a managed basis.

A statement from the group said: “Esken has received notification that documents filed by CGI in the High Court have been served on Southend Airport, claiming certain technical breaches by Southend Airport with respect to the convertible loan agreement. Esken does not agree with CGI’s claimed interpretation of the convertible loan agreement and will support Southend Airport in defending the action vigorously.

“In addition, Esken will continue with its sale process to find the right long-term owner for the airport.”

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