Shares plunge after Stobart Air collapse
SHARES in Esken nosedived as the City reacted to the collapse of Stobart Air.
Esken, formerly known as Stobart Group, called in liquidators over the weekend after a deal to sell the airline to a 26-year-old Isle of Man bitcoin entrepreneur fell through. Almost 500 jobs are at risk at the regional airline, which ran flights on behalf of Aer Lingus and other groups.
And thousands of passengers risk having their flights cancelled – and possibly even being stranded – as a result.
It is a mighty fall from grace for the former FTSE 250 company, which previously ran the Eddie Stobart trucking business and had grand ambitions to become an energy, infrastructure and aviation major. Some of this had already been scaled back, and the pandemic pummelled its aviation arm and finances.
Esken confirmed yesterday that it was retreating further and will concentrate on its prize asset, Southend Airport, and biomass businesses. Other parts of the company are earmarked for disposal, notably Carlisle Airport which serves the Lake District.
It is in talks to secure £120m of emergency funding by selling a 30pc stake in Southend, valuing it at around £400m, and has been forced to seek outside help because the collapse of Stobart Air has left it on the hook for aircraft lease payments worth tens of millions of pounds.
The white knight is Carlyle Group, the American buyout fund. Esken dipped 8.6pc, or 2.65p, to 28.35p, making it the biggest faller on the FTSE All-Share index.
The wider market, however, made gains. The FTSE 100 ended higher, boosted by heavyweight energy companies BP (up 1.9pc, or 6.1p, to 330.4p) and Shell (up 2.5pc, or 34p, to 1393.6p) which rose in tandem with oil prices.
The Footsie hit its highest level since February 2020, reaching 7188, but it fell back slightly to end 0.2pc higher, up 12.62 points, to 7146.68. The FTSE 250 only just managed to stay in the black, closing 0.1pc higher, up 10.38 points, to 22,744.51.
Both indexes were held back by travel and leisure stocks as investors braced for a four-week lockdown extension.
The stock market victims included British Airways- owner IAG, which fell 4.2pc, or 8.48p, to 194.72p, Wagamama- owner the Restaurant Group – down 4.3pc, or 5.6p, to 123.4p – and conference organiser Informa, which dipped 2.4pc, or 13.2p, to 530p.
Shares in over-50s group Saga were down 2.3pc, or 9.4p, to 401p, after it said in a brief annual meeting trading update that insurance sales were down and it was burning around £7m a month in the four months to May 31.
Aviation services group John Menzies, down 1.2pc, or 4p, to 335p, was on the back foot despite winning a deal to manage and operate a new cargo terminal at one of the world’s busiest airports, Guangzhou Baiyun International in China.
And even Just Eat Takeaway slid 2pc, or 130p, to 6361p as traders brushed off the assumed boost the lockdown delay will have on orders. A stock market announcement also revealed that US asset manager Blackrock now owns more than 6pc of the company.
Toronto-based chip designer Alphawave IP climbed after it reported record year- to- date bookings of more than £135m in its half-year results.
The figures will come as a relief after Alphawave’s disappointing market debut last month, when its shares fell by 20pc during its first day of trading.
Alphawave’s listing had been seen as a vote of confidence in London’s tech expertise, but went the same way as the disastrous float of Deliveroo – up 0.6pc, or 1.5p, to 256.9p.
Alphawave shares rose by 1.3pc, or 4p, to 319p.