THIS is the full letter given to investors after the private operator, Esken formally announced it would withdraw from Teesside Airport.

The operator, formerly known as the Stobart Group, yesterday told the London Stock Exchange that it would be concluding its partnership.

It came just two years after it was brought in to help implement a ten-year rescue plan to eventually bring the airport back into profit.

Read more: Stobart Group held 25 percent stake in Teesside Airport handed back

On Wednesday, Esken was accused of "abandoning" the airport with Labour figures on Teesside raising questions on why it had withdrawn.

Labour MPs Alex Cunningham and Andy McDonald called for clarity from the Tees Valley Mayor Ben Houchen as they feared Esken had left the airport's costs to the taxpayer.

Read more: Stobart accused of 'abandoning' Teesside Airport - as Ben Houchen urged to provide answers

In response, Mr Houchen had accused the Labour Party of praying at "every turn" for the airport to fail as he said it now had a "fantastic management team."

A spokesperson for Esken later added that now felt the right time to step away, adding that the airport had made tremendous progress in the past year.

The full contents of letter that was provided to investors on Tuesday morning, just hours before the announcement was made public has now emerged.

In it, Esken reveals that it would be set to benefit from any "proceeds" if the airport was sold in the next eighteen months. 

The letter in full 

"Esken played a key role in initially supporting Teesside International Airport's development following its acquisition by the Tees Valley Mayor and Combined Authority on 24 January 2019 and return to public ownership.  

"Over the last 12 months, Teesside International Airport has secured an airline partnership with Loganair, attracted new routes and installed a strong, experienced leadership team, with the oversight of the Tees Valley Mayor and Combined Authority. Given these positive developments, Teesside International Airport no longer requires the support of Esken as an external strategic partner.

"As a result of these positive developments, Esken will cease its management agreement with the airport and transfer its 25% ownership of Teesside International Airport to a new Teesside Airport Foundation for a nominal consideration (the "Disposal").

"Esken may be entitled to a deferred consideration. If there were to be a future sale of Teesside International Airport before 25 January 2023 Esken has agreed with Tees Valley Combined Authority that Esken would be entitled to share in the proceeds of that sale up to an amount not exceeding £31.3m.

"Executive Chairman David Shearer said, "We are pleased to have had the opportunity to play a role in supporting Teesside International Airport's return to public ownership and help it on the start of a journey that is now underway with a multimillion-pound overhaul of the terminal."

"Tees Valley Mayor Ben Houchen said, "Esken has played a key role in supporting Teesside International Airport with the transition back into public ownership.

"Their hard work has been an important part of getting us to this point. As we enter a new phase in the airport's transformation and development, I'd like to thank them for the role they have played helping us get ahead of schedule in delivering our 10-year plan for our airport."

"The Disposal described above constitutes a Class 2 transaction for Esken for the purposes of the Financial Conduct Authority's Listing Rules.

"Esken's shareholding in Teesside International Airport was treated as an investment on the Group's balance sheet and ascribed a £nil value as at 28 February 2021.

"A £nil value will be ascribed to the deferred consideration. Esken's shareholding in Teesside International Airport did not contribute to the Group's full year results for the year ended 28 February 2021. Any proceeds arising from the Disposal will be used for general corporate purposes."

As part of the terms agreed, Esken said it would be entitled to up to £31.3m in proceeds from any sale of the airport if completed by January 2023.

Safeguards 'in place' against sale without referendum

As a result, Mr Houchen yesterday said that a referendum would now be required to "seek permission" from residents in the Tees Valley if the airport is ever put up for sale.

He said: “With the requirement of a referendum, never again will our airport face the prospect of being sold off without the express permission of local people.

"This is the people’s airport run for local people by local people. So it’s only right that local people should decide its future."

That prompted former Labour leader of Redcar and Cleveland, Sue Jeffrey to raise concerns that this could affect any residual value if things "went wrong."

She said: "If things did go wrong the airport and land would retain/increase in value, could be sold and the proceeds offset against any losses. 

"If by setting up a charitable foundation TVCA are now bound by a referendum before sale this will be costly and time consuming and will inevitably affect any residual value."  

Read more: Stobart accused of 'abandoning' Teesside Airport - as Ben Houchen urged to provide answers


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