Investor plans cargo hub in Teesside air­port deal

Brit­ish investor Michael Flacks has said he is in talks to acquire a 49 percent stake in North East Eng­land’s Teesside Inter­na­tional Air­port as part of plans for invest­ment in the region.

The air­port was nation­al­ised in 2019 by Tees Val­ley’s Con­ser­vat­ive mayor, Lord Ben Houchen, under a flag­ship and elect­or­ally pop­u­lar local pledge that was inten­ded to secure its future as a pas­sen­ger hub.

Local author­it­ies jointly paid £40mn for the acquis­i­tion from Peel Hold­ings. The air­port has remained loss­mak­ing and has since received repeated local pub­lic sec­tor bail­outs.

Flacks, a Manchester-born deal­maker focused on cor­por­ate turn­arounds, said he was in talks about buy­ing a minor­ity share in the air­port and would plan fur­ther invest­ment to build it into a cargo, repair, and main­ten­ance hub, pivot­ing from pas­sen­ger flights.

The pro­posed deal would value the air­port at £40mn, the same price paid by local gov­ern­ment five years ago.

“It ticks all the boxes,” he said. “It’s a long-term, sig­ni­fic­ant invest­ment.”

Flacks said the deal, which he hoped to close by the end of August, would make sense for the local tax­payer. “They’ve been los­ing money for years,” he noted, adding that he wanted to make the air­port prof­it­able.

“The way to make it prof­it­able is to do dif­fer­ently to what they’re doing. It’s not that they’re not doing a good job, but run­ning a pas­sen­ger air­port is a hope­less exer­cise,” he said.

Under the deal envis­aged by Flacks, he would have oper­a­tional con­trol of the air­port while the local coun­cils, which would own the remain­ing 51 per cent, would con­tinue as a “silent part­ner”.

If suc­cess­ful, he said he would fur­ther invest in the air­port to build new facil­it­ies such as hangars. He said he would aim for only a slight increase in annual pas­sen­ger traffic. “My offer isn’t just about buy­ing it, it’s about devel­op­ing it for fur­ther use,” he said.

The group has more than $4bn of assets, accord­ing to its web­site. Flacks’ for­tune is worth more than £1.2bn, accord­ing to the Sunday Times rich list.

He recently acquired a 500-acre site next to the Teesside air­port that formerly hos­ted a plant owned by the chem­ic­als group Ele­mentis.

The air­port is of huge polit­ical sig­ni­fic­ance to Teesside and to Houchen, who was re-elec­ted for a third term on a reduced major­ity in the local elec­tions earlier this month.

Houchen said that in recent months there had been interest “from a num­ber of firms want­ing to invest in our air­port and take a share in the own­er­ship”, although he did not name Flacks.

He called the interest a “massive vote of con­fid­ence”, adding that in recent weeks offi­cials “have done the dili­gent thing in assess­ing these pro­pos­als”.

Nev­er­the­less, the air­port would be “stay­ing as it is”, he added.

Source: https://ft.pressreader.com/v99c/20240518/281573770801973