Member Info for mtro99923

And how does that benefit Esken share holders?

Roughly speaking the money will now flow as follows :

Secured creditors (Banks, finance etc...)

preferential creditors (Staff, HMRC etc...)

Essential creditors (those required to continue supplying in order to keep the business going)

Administrators - (who get their bill up as high as possible)

Noisy creditors (he who shout loudest)

The rest of the creditors

Administrators again - this time they hoover up what's remaining

Shareholder fund......99/100 this means zero!

Lets not kid ourselves here

Super charger - If I could be bothered I would timeline all the events that this car crash of a company has endured, and transpose your comments on that timeline. Just for a laugh - but as I said - I can't be bothered.

As a long suffering investor in this shower I am fuming. The arrogance, incompetence and disingenuous nature of this board and previous boards is staggering. The language they have constantly used has been boarder line misleading and dishonest to say the least.

As a fan of Southend Airport - the main reason I backed these idiots - I'm sort of glad - at least now we can hope that someone sensible will now take it in the right direction rather than the pipedream of being a significant London Airport with millions of passengers. It's a great local airport that used to have a good spread of business within an effective commercial eco-system. Viable commercial routes are of course an important ingredient but not at the cost of all the other revenue streams. Utter madness.

I can only assume that SC's valuation of £600m comes from Carlyle's claim of £197m which may be converted into 30% of the business. Mathematically all makes sense. But reality is that the £197m includes full repayment of the capital AND all the interest up to Aug 2028. The 30% was based on the original £120m less the 'ring fenced' £30m that had to go on the BS of LSA Co Ltd. So 30% for £90m. Valuing the airport at around £300m which seems about right.

Carlyle will use the interest between now and August as extra leverage to obtain the rest of the airport for a song. My fear is that the convertible loan agreement is so one sided that they may well pull that off. The Esken board have time and again got into to terrible deals that have then affected the business negatively and crashed the BS and in turn share price. The ridiculous leases on the ATR fleet are a prime example. I live in hope that they can get out of this trap but expectation is less optimistic!

Q: If they can successfully fight off Carlyle, and sell the airport company for say £300m, what would that do to the share price?

Thanks

SC - I think you've missed the rather large elephant in the room. The relationship is between Carlyle and London Southend Airport Co. Ltd. In that sense it has nothing to do with Esken. Should Carlyle gain control over that company through their default claim it will mean they've managed to wrestle away ownership rather than pay for it (Beyond the initial loan of course). Should they achieve that then us share holders will get nothing. The are vulture capitalists dressed as venture capitalists. They are 'THE' threat to Esken concluding a decent value sale of the airport - or to be more technical - 'London Southend Airport Company Ltd' who are the current lease holder. Carlyle are trying to gain the airport for a song. They might get away with just their initial 'loan' of £120m. I hope that with Tosca increasing their stake it will serve to protect the only remaining asset of any value of Esken. Unless they are in bed with Carlyle - then it's game over!

There will be demand if the airport can sort itself out either way. If you're an airline trying to make strategic decisions on where to put your assets you need to have some security on the future. We know the passengers will come if the flights are there. It's just whether the airport will be there this time next year and if it is, who will be running it. Until that is determined the airlines will be rightly cautious. In an ideal world, CGI get back in their box, Esken sell the airport for market value to someone who knows what they're doing, shareholders are then not completely screwed and the airport can thrive. Ultimately this comes down to who will be selling the airport - Esken or CGI.

Does the increase allow them to have people on the board?

SC - I think we all read what Esken say but can also read between the lines too. Of course they have to put a positive spin into these statements but the reality is they are backs against the wall and the longer term future of Esken, Southend Airport and the share holders is largely out of their hands.

The little bits of new business going to Southend Airport are encouraging but in reality it's a million miles short of what would be required for Esken to pull out of the nose dive. Might help the airports future going forward but probably at the expense of the existing Esken share holders.

Super Charger - You see the potential here to make a shed load out of Southend Airport - Surely you could put together an investment portfolio to buy the airport from Esken. Right now you're in the driving seat as no-one else seems to have that vision. £2bn, with say a YoY ROI of 5% is £50m EB ITDA. Assuming that EBITDA runs at around 5% of annual revenue then that's annual revenues of £1bn. At the moment it's just shy of £10m based on say 100k passengers. Roughly £100 per passenger. So 10 million passengers required. Or, to look at it another way, an increase of 9.9m passengers. Or 100 fold increase on current numbers - BTW that would mean a flight departing every 4 minutes year round.

What could possibly go wrong?

Supercharger - just a bit of fact checking on your last post.

EasyJet don't operate 'large body' aircraft. They exclusively operate Airbus A320 family which is narrow body.

EasyJet or to that matter Ryanair, have NEVER bought, leased or operated an airport.

Southend airport at $1bn? The reality is that it's probably less than 10% of that.

It would be helpful if the posts could have a modicum of truth and fact about them.

For any potential suitors to buy the airport, success is predicated on other airports in the vicinity (STN,LTN,LGW,LCY) getting to full capacity and then hoping they don't expand their own operations to mop up that growth. To my knowledge all of those airports are expanding their operations already. On the positive side of course there is a chance. With a tail wind, all the planets lining up etc....that they could get to a break even point or even make a modest profit.

The reward is at long odds with modest returns and the risk is likely with high cost. It's a huge gamble based on hope over fact.

Let's not forget that Esken are backed into a corner with very little negotiating power left. Once the eventual proceeds of the sale of the airport are used to settled the pension fund gap and of course the publicised Director bonuses it's difficult to see what will come the shareholders way. Question : How on earth would the directors get any sort of bonus ? Aren't bonuses normally based on good performance?

SC - Tottenham Stadium cost about £1bn. It brings in huge revenue through football, other sporting events and concerts. and moreover generates positive cash and a decent profit and is sustainable. The income is essentially guaranteed. And is considered the best sports stadium in the world. I'm not sure Southend Airport can say it's the best airport in the world!

LSA on the other hand is and has been loss making - eye watering losses in fact and has no credible plan or forecast to flip into any sort of profit. The only way that the 'assets' of LSA can create a ROI is by operating as a profitable airport. The runway, terminal, control tower etc... are only assets if they are utilised as an airport. If not they are white elephants....in fact the flip to being 'liabilities' as the cost to operate them far exceeds any realistic revenue earned from having them. It haemorrhages cash at an alarming rate. It's too far away from and on the wrong side of London to be considered a proper London Airport, and too close to London and the other 'proper' London airports to be considered a regional airport. The business model is all wrong. Since Stobart / Esken took over the eco system of businesses there has all but disappeared due to the myopic vision of BODs past and present who relentlessly forced these businesses out in pursuit of low cost airlines. It has failed yet that seems to be the only path they follow.

A better football comparison would be Colchester United. in 2010 they spent over £20m on a new stadium with a capacity of over 10,000. Thinking that this would in turn generate the revenue so they could push up the leagues into the promised land. In reality they languish at the bottom end of the bottom division with an average gate of 2,500 - or 25% capacity. They have a financial black hole of over £30m now. The comparison is further illustrated by the fact the main 'asset' costs a fortune to run and is not really sellable for anything else than it's specific purpose. Exactly the same as the assets of LSA. The difference being that LSA is currently running at less than 2% capacity.

Esken would do well to offload this liability as soon as possible.

Please correct me if I'm wrong but it seems the only real asset Esken now have is Southend Airport? That being the case what is the realistic price they could sell their 'currently' 70% for? This assuming Carlyle don't snatch it through default mechanisms. Lets say they somehow realise £100m for that 70%, would they be able to settle all their liabilities and would there be anything left for shareholders? Is this stock as worthless as the current 1.4p suggests it is?

Please correct me if I'm wrong but it seems the only real asset Esken now have is Southend Airport? That being the case what is the realistic price they could sell their 'currently' 70% for? This assuming Carlyle don't snatch it through default mechanisms. Lets say they somehow realise £100m for that 70%, would they be able to settle all their liabilities and would there be anything left for shareholders? Is this stock as worthless as the current 1.4p suggests it is?

From a Southend Airport perspective the news of EasyJet is hopefully good news for the future for the new owners . For Esken though it's a bit different. £60m loss in 6 months to August for the group. Losses of over £27m for the airport in the FY to Feb 2023, which includes a staggering £17m in interest.

The extra flights and trajectory it's showing should add a bit of value to the sale of the airport hopefully but it's clear that CGI are the vultures waiting to pounce when the time is right and will surely look to get the airport for as little as possible. They are firmly in the driving seat and already showed their hand with the court proceedings. It's hard to see any proceeds from offloading the airport, however that transpires, going into the shareholder pot.

The upside is for the Directors in recognition of the great value they have brought to the share holders over the years.

Quote from their own statement.

"The Board also intends to introduce a new Executive Remuneration Scheme which will facilitate certain incentive entitlements for its Executive Directors"

This seems staggering to me.

Hi SC, understood - It sounds like you are a canny investor looking for big percentage leaps in distressed shares? That being the case, the trumpet blowing for this one is shrewd insofar as it certainly meets that criteria. Many of us are / were more invested in the business itself and have heard all this BS for many years. The fact is that merely 6 years ago this share was over £3.00 - at 2.5p as it is now it can only be described as an utter mess Terrible management decisions being masked by barely believable statements of positivity that were not based on facts. The feeling on these forums is high because we've all heard it so many times over the years. They (BOD, past and present) continue to operate with impunity on an inevitable path to ultimate failure. I'm sure it's fun for junk share traders but not for those who actually took in the hype back in the day. It's the lack of honesty and integrity that really gets me.

SC - It really is difficult to understand what your motive is for these regular upbeat interpretations in your posts which fly against any common sense, history or accuracy. To suggest that somehow the blue rinse brigade will rescue Southend airports future, and in turn this dreadful share performance by buying cheap flights to Alicante in the winter is beyond fanciful. It is clear, and has been the minute ESKN and Carlyle signed the document, that Carlyle had more than an eye on a distressed asset, and I would think confident that ESKN would fail. The vulture on the fence waiting for inevitable breach. ESKN are backed into a corner with no feasible way out. All along they have failed to deliver any sort of value to shareholders or stakeholders and this seems like the beginning of the end to sorry saga with the only winners being the suits in the ESKN board room claiming their inflated salaries despite their incompetence's over the years. Funny enough, spinning a similar narrative to us all as you do. Are you on the board?

Supercharger - Just so I understand - EasyJet selling really cheap tickets on a handful of flights means that Southend airport will be profitable? and in turn drive up the share price of Esken? I would suspect that EasyJet are able to sell cheap tickets from Southend because they have a super cheap deal with the airport. Anyone can sell a tenner for a fiver. As others, including me have repeatedly said, all this does is increase the losses and will take them to the point of disaster a lot quicker.

“the definition of insanity is doing the same thing over and over and expecting different results”.

It's one flight a week for 12 weeks. So maybe another 2000 passengers towards the 3m target. Every little helps.