Southend Airport owner lines up £100m sale of biomass arm

The London-listed owner of Southend Airport is close to clinching a £100m deal to sell its biomass division.

Sky News has learnt that Esken, formerly known as Stobart Group, is in advanced talks to offload the business to Pioneer Point Partners, an independent infrastructure investor.

The deal could be signed as early as this week, according to one industry insider.

The £100m valuation includes debt as well as equity, and it was unclear on Monday evening how much of the proceeds would be returned to Esken shareholders or used to pay down debt.

If completed, the sale will free Esken's board to focus on an auction of Southend Airport, which will have a much higher valuation.

Last month, the company told investors that it had received notice of legal action brought by a Carlyle fund, a lender to the airport.

Esken's renewables unit supplies biomass fuel, which is processed from waste-wood and by-products, and then delivered to power plants.

It declined to comment on the talks with Pioneer Point Partners but had previously said it would "consider all options for the operating businesses and may conclude that it is in the best interests of all stakeholders to progress a sale or partial sale of one or both of the Renewables or Aviation divisions to secure the long term potential of these businesses and deliver value for Esken shareholders".

Shares in Esken, which is being advised by Canaccord Genuity, closed on Monday at 2.7p, giving it a market value of just £27.5m.

Pioneer Point Partners could not be reached for comment.