RiverOak pledges to stop auction of airport assets

The American firm which has pledged to underwrite a compulsory purchase of Manston airport says it will take out an injunction to halt the further sale of assets at the site. RiverOak Investment Corp, of Stamford, Connecticut, says it will make the move to stop the "scorched earth" auction of vital airport goods, such as the control tower, off field lighting and communication systems, in September if Thanet council agrees to a commercial partnership.

RiverOak technical advisor, and Kent County Councillor for Sturry and Herne, Alan Marsh said it is vital Thanet council agrees to move forward with a CPO on Manston and announces the US firm as its preferred partner on Thursday. He added:

"As soon as TDC announce their commitment to working with RiverOak then RiverOak has, in this country, a legal position through which it can then go to the Inns of Court for an injunction, or whatever legal means needed, to prevent the September auction. But, if TDC keep talking about it but do not go forward, RiverOak will have no legal position because that position can only start when TDC go ahead with the CPO with RiverOak as preferred partner."

The firm sent a letter last week outlining its proposal to indemnify TDC against any costs of the CPO and the sale price of the airport. A Heads of Terms document, outlining a full agreement, was also sent after legal advice.

Mr Marsh, a trained pilot who has taken 3,000 flights out of Manston and was previously a test pilot for the and European Commission, said time is now of the essence with one asset auction taking place this week and the second, of major equipment, just weeks away. Another spokesman for RiverOak said if the main assets are sold it could cost £5 million to replace them.

The company says it believes Manston could be viable for air freight, aviation services including maintenance, recycling, private charter and commercial passenger services. It claims the experience of one of its senior team members in refinancing Alliance Fort Worth Airport in Texas had proved the case. The firm says it can turn Manston around from the annual £3 million losses before closure to breaking even in 16 months.

But an agreement to go forward with the CPO and partner RiverOak at last night's Cabinet meeting did not look likely. The council has received an initial consultant's report on the future of Manston airport and its possible compulsory purchase. The review, by Falcon Consultancy Limited, says Manston is unlikely to be successful unless it changes the way it is operated, although it "could be viable on the basis of a 20-year business plan that sets out a phased development of the airport".

At the meeting, cabinet members were due to be asked to decide whether they accepted the recommendations in the report and to share this with the airport's current owners. A further stage of developing a business plan and market testing would then follow. A CPO decision would involve a procurement process to identify an indemnity partner, says TDC.

Deputy leader Richard Nicholson said that process could "take quite a while", citing the Dreamland CPO as an example, and said the council was duty bound to approach airport owner Ann Gloag to see if there was any way to avoid the CPO.

A spokesman for Kent Facilities Ltd said:

"The auction is all part of the ongoing process of the decommissioning of the former airport site. The decision to pursue a CPO is a matter for the council and any potential partners to consider."

RiverOak sent the letter to Thanet council leader Iris Johnston, deputy leader Richard Nicholson and senior officers pledging to underwrite a Compulsory Purchase Order for Manston airport. The firm, which offered the full £7 million asking price for Manston prior to closure in May, but had its offer rejected by the current owner, pledged to take on the costs in a "back to back" agreement with TDC.

The online auction for Manston airport assets took place on Wednesday and yesterday (Thursday). More than 700 lots, including vehicles, duty-free goods, fire equipment, forklift trucks and container loaders, generators and furniture and equipment from the passenger terminal and security areas, went under the hammer.

Peaker Pattinson auctioneers plan to hold the second sale, by tenders only, in September.

Thanet Gazette 6th Aug 2014