March 17, 2020 / 7:46 AM / 18 days ago

Stobart calls out liquidity needs as virus dents airport traffic

(Reuters) - Infrastructure group Stobart (STOB.L) said on Tuesday additional liquidity is likely to be required because of the disruption to its aviation business, especially the London Southend Airport, as the coronavirus crisis hammers airport traffic.

Talks of an investment for the airport with a potential strategic airport development partner are on hold due to the uncertainties caused by the virus, UK-listed Stobart said.

The company said it was in talks for several months with the potential partner having indicated a headline value for the airport of between 700 million and 800 million pounds.

“The short-term uncertainty driven by the COVID-19 outbreak has impacted on global airport passenger traffic generally, and London Southend Airport specifically,” the company said.

The company said it was reviewing the most appropriate sources of funds to cover the time period during which the airport is affected by the virus.

As the world goes through strict measures to stem the spread of coronavirus, airports and travel-related businesses have become a major casualty as governments advise people to avoid trips that are not essential.

The company further warned that a number of guarantees and potential lease obligations exist between itself and the separate units of Connect Airways, which have been hurt by the collapse of regional airline Flybe.

Stobart is looking at how to best address these liabilities and is in discussions with stakeholders regarding the most appropriate solutions, the company added.

For the year ended Feb. 29, Stobart said its core aviation and energy divisions’ performance was broadly in line with management expectations, while its rail and civils division traded below expectations.

Reporting by Muvija M in Bengaluru; Editing by Shailesh Kuber, Bernard Orr

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