London Southend Airport lender Carlyle demands faster loan repayment

LONDON (Reuters) -Esken, the owner of London Southend Airport, is facing demands by a Carlyle fund to repay an outstanding convertible loan four years before its maturity date, the group said on Tuesday.

The demands are part of a legal dispute over a convertible loan extended by Carlyle Global Infrastructure Fund (CGI) in 2021. Convertible loans are a form of debt that can be transformed into a company’s shares under certain conditions.

Carlyle, which last year launched legal action over an alleged breach to the convertible loan agreement, has now requested payment of 193.75 million pounds ($246.88 million) by Feb. 16, Esken said.

Esken said an acceleration of the debt repayments would be “value destructive” to all stakeholders and it is focused on finding a new owner for the airport.

“Following repeated and continuing defaults under our loan agreement since 2022, Carlyle can no longer wait patiently,” a spokesperson for the U.S. asset manager said.

“We have made numerous proposals to Esken and the airport to secure the airport’s long-term future, and look forward to stable ownership of the airport by an experienced and financially strong entity.”

Esken said it continued to support London Southend Airport’s (LSA) liquidity needs and that the airport had not defaulted on any payments.

“Esken is disappointed that CGI has chosen to take this action based on purported technical defaults of the convertible loan agreement. Esken and LSA are open to engaging with CGI to resolve the issue,” a spokesperson for the British group said.

($1 = 0.7848 pounds)

(Reporting by Pablo Mayo Cerqueiro Editing by Louise Heavens and Mark Potter)