TIDMESKN
RNS Number : 0280S
Esken Limited
01 November 2023
This announcement contains inside information for the purposes
of article 7 of the Market Abuse Regulation (EU) 596/2014 as it
forms part of domestic law by virtue of the European Union
(Withdrawal) Act 2018.
1 November 2023
ESKEN LIMITED
("Esken" or the "Company")
Proposed Disposal of Esken Renewables
Proposed Transfer from Premium Listing to Standard Listing
Esken, the aviation and renewable energy group, is pleased to
announce that it has agreed the conditional disposal of its wholly
owned subsidiary, Esken Renewables Limited ("Esken Renewables"),
(the "Disposal").
Key terms of the Disposal
-- The proposed disposal of the entire issued share capital of
Esken Renewables to Pioneer Balmoral UK Limited (the "Purchaser"),
a vehicle fully owned and funded by the sustainable infrastructure
fund, Pioneer Infrastructure Partners SCSp, managed by Pioneer
Point Partners LLP ("Pioneer");
-- Consideration for the entire issued share capital of Esken
Renewables of GBP77.6 million, plus the Intercompany Loan
Reimbursement, expected to total GBP6.9 million, which represents
an equity value of GBP84.5 million, to be satisfied in cash . This
reflects an enterprise value of GBP107.7 million, with adjustments
made for cash and debt like items;
-- Net proceeds of the Disposal are expected to total GBP78.5
million (which includes the Intercompany Loan Reimbursement and is
net of transaction costs), which will be used to immediately repay
the GBP55 million of committed funding drawn under the Facilities
Agreement and associated costs (based on the Company's latest
calculation, the amount to settle will be GBP70.6 million in
total). The balance of the net proceeds will be used: (i) to
further contribute approximately GBP3.6 million to the Group's
defined benefit pension scheme; and (ii) to provide additional
working capital in the short term;
-- The Disposal will provide Esken with increased financial
stability to support the previously announced managed sale of
London Southend Airport ("LSA") . While early in the process, the
Board has been encouraged by the initial level of interest from a
range of parties who recognise the long-term strategic value of
LSA;
-- Completion of the Disposal is conditional on inter alia:
approval by Shareholders at the General Meeting; the Deed of
Settlement and Variation being duly executed by Esken Renewables
and Tilbury Green Power Limited ("TGP"); and the satisfaction or
waiver of the Cash Sweep Condition; and
-- The Disposal is expected to complete in early December 2023.
David Shearer, Executive Chairman of the Company commented:
I am pleased to be able to announce the sale of our Renewables
business today.
It is almost a year since the Board announced that we would
undertake a strategic review of the core operations of the Group.
Since then, we have worked with advisers on a comprehensive process
to find the right strategic partner for the Renewables business
going forward. I am pleased that, in Pioneer, we have found such a
partner and wish the proposed new owners, as well as the management
team and staff, good luck for the future.
The sale of Esken Renewables is a positive outcome set against a
persisting challenging market with an increase in interest rates
over the last 12 months that has supressed M&A activity.
Following this sale, and subsequent repayment of our debt facility,
our focus will now primarily turn to addressing the maturity and
terms of the Exchangeable Bond, and to the sale of LSA, to
facilitate a managed process to realise value for Shareholders.
Proposed Transfer and Executive Remuneration Scheme
In addition, the Board intends to transfer the Company's listing
from the Premium Listing segment of the Main Market of the London
Stock Exchange to the Standard Listing segment (the "Proposed
Transfer").
The Board also intends to introduce a new Executive Remuneration
Scheme which will facilitate certain incentive entitlements for its
Executive Directors, that fall outside the scope of the Company's
current remuneration policy, and seeks shareholder approval to
implement the Executive Remuneration Scheme.
The Disposal, the Proposed Transfer and the implementation of
the Executive Remuneration Scheme, are all subject inter alia to
approval of Shareholders at the General Meeting. A circular,
convening the General Meeting, will be published and notified to
Shareholders shortly (the " Circular ") .
Enquiries:
Esken Limited C/o Teneo
Canaccord Genuity
Adam James, Emma Gabriel (Sponsor and Broker)
Chris Robinson, Ben Spencer (Financial Adviser)
0207 523 8000
Teneo
Olivia Peters / Giles Kernick
020 7353 4200
esken@teneo.com
TB Cardew, PR Advisers to Pioneer Point Partners
Tom Allison T: +44 (0) 7789 998 020
Henry Crane T: +44 (0) 7918 207157
Important Notices
Information regarding forward-looking statements
This announcement contains statements which are, or may be
deemed to be, "forward-looking statements" which are prospective in
nature. All statements, other than statements of historical fact,
are forward-looking statements. They are based on intentions,
beliefs or current expectations and projections about future
events, and concerning, among other things, the business, results
of operations, prospects, growth and strategies of, the Company,
the Group, Esken Renewables or the Continuing Group, and are
therefore subject to risks and uncertainties which could cause
actual results to differ materially from the future results
expressed or implied by the forward-looking statements. Often, but
not always, forward-looking statements can be identified by the use
of forward-looking words such as "plans", "expects", "is expected",
"is subject to", "budget", "scheduled", "estimates", "forecasts",
"goals", "intends", "anticipates", "believes", "targets", "aims",
"hopes", "continues" or "projects". Words or terms of similar
substance or the negative thereof, are forward-looking statements,
as well as variations of such words and phrases or statements that
certain actions, events or results "may", "could", "should",
"would", "might" or "will" be taken, occur or be achieved. Such
statements are qualified in their entirety by the inherent risks
and uncertainties surrounding future expectations.
Forward-looking statements include statements relating to: (a)
future capital expenditures, expenses, revenues, earnings, economic
performance, indebtedness, financial condition, dividend policy,
losses and future prospects; (b) business and management strategies
and the expansion and growth of the Company's, the Group's, Esken
Renewables' or the Continuing Group's operations; and (c) the
effects of economic conditions on the Company's, the Group's, Esken
Renewables' or the Continuing Group's business.
Such forward-looking statements involve known and unknown risks
and uncertainties that could significantly affect expected results
and are based on certain key assumptions. Many factors may cause
actual results, performance or achievements of the Company, the
Group, Esken Renewables or the Continuing Group to be materially
different from any future results, performance or achievements
expressed or implied by the forward-looking statements. Important
factors that could cause actual results, performance or
achievements of the Company, the Group, Esken Renewables or the
Continuing Group to differ materially from the expectations of the
Company, the Group, Esken Renewables or the Continuing Group
include, among other things, general political, business and
economic conditions, industry and market trends, competition,
changes in government and changes in law, regulation and policy,
including in relation to taxation, as well as political and
economic uncertainty (including, but not limited to, the
Ukraine-Russia conflict), stakeholder perception of the Company,
the Group, Esken Renewables or the Continuing Group and/or the
sectors or markets in which it operates. Such forward-looking
statements should therefore be construed in light of such factors.
Any information contained in this announcement on the price at
which shares or other securities in the Company have been bought or
sold in the past, or on the yield on such shares or other
securities, should not be relied upon as a guide to future
performance.
Neither the Company nor any of its Directors, officers or
advisers provides any representation, assurance or guarantee that
the occurrence of the events expressed or implied in any
forward-looking statements in this announcement will actually
occur. You are cautioned not to place undue reliance on these
forward-looking statements, which speak only as at the date of this
announcement.
Other than in accordance with its legal or regulatory
obligations, neither the Company nor the Sponsor is under any
obligation to, and each of the Company and the Sponsor expressly
disclaims any intention or obligation to, update or revise any
forward-looking statements, whether as a result of new information,
future events or otherwise.
No profit forecast
Unless otherwise stated within this announcement, no statement
in this announcement is intended as a profit forecast or a profit
estimate and no statement in this announcement should be
interpreted to mean that earnings, earnings per share or income,
for the Company, the Group, Esken Renewables or the Continuing
Group, as appropriate, for the current or future financial years
will necessarily match or exceed the historical published earnings,
earnings per share or income for the Company, the Group, Esken
Renewables or the Continuing Group, as appropriate.
Rounding
Percentages in tables have been rounded and accordingly may not
add up to 100 per cent. Certain financial data have also been
rounded. As a result of this rounding, the totals of data presented
in this announcement may vary slightly from the actual arithmetic
totals of such data.
Cautionary statement
This announcement is not intended to, and does not constitute,
or form part of, any offer to sell or an invitation to purchase or
subscribe for any securities or a solicitation of any vote or
approval in any jurisdiction. Shareholders are advised to read
carefully the formal documentation in relation to the Disposal once
it has been despatched. Any response to the Disposal should be made
only on the basis of the information in the formal documentation to
follow.
This announcement has been prepared for the purpose of complying
with the applicable law and regulation of the United Kingdom and
information disclosed may not be the same as that which would have
been disclosed if this announcement has been prepared in accordance
with the laws and regulations of jurisdictions outside the United
Kingdom.
Important information relating to financial adviser
Canaccord Genuity Limited (the "Sponsor"), which is authorised
and regulated in the United Kingdom by the Financial Conduct
Authority, is acting solely for the Company, and for no-one else,
as sponsor, broker and financial adviser in connection with the
Disposal and the Proposed Transfer and will not be responsible to
anyone other than the Company for providing the protections
afforded to its clients or for providing advice to any other person
in relation to the Disposal and the Proposed Transfer, the content
of this announcement or any other matters described in this
announcement. To the fullest extent permitted by law, neither the
Sponsor nor any of its affiliates assumes any responsibility
whatsoever for or makes any representation or warranty express or
implied, in relation to the contents of this announcement,
including its accuracy, completeness or verification or for any
other statement made or purported to be made by it, or on its
behalf and nothing contained in this announcement is, or shall be,
relied upon as a promise or representation in this respect whether
as to the past, present or future, in connection with the Company,
the Group, Esken Renewables, the Continuing Group, the Disposal or
the Proposed Transfer. The Sponsor and its affiliates accordingly
disclaim to the fullest extent permitted by law all and any duty,
responsibility and liability whether arising in tort, contract or
otherwise which it might otherwise be found to have in respect of
this announcement or any such statement or otherwise.
Publication on website
A copy of this announcement will be available for inspection on
the Company's website at: www.esken.com. For the avoidance of
doubt, the contents of this website are not incorporated into and
do not form part of this announcement.
Inside information
This announcement contains inside information. The person
responsible for arranging this announcement on behalf of Esken is
Adam Davidson, General Counsel and Company Secretary.
Proposed disposal of Esken Renewables Limited, proposed transfer
from Premium Listing to Standard Listing and certain proposals for
executive remuneration
Introduction
The Board today announces the proposed disposal by its
subsidiary, Esken Holdings Limited (the "Seller"), of the entire
issued share capital of Esken Renewables to Pioneer Balmoral UK
Limited, a vehicle fully owned and funded by the sustainable
infrastructure fund, Pioneer Infrastructure Partners SCSp, managed
by Pioneer Point Partners. The consideration for the entire issued
share capital of Esken Renewables is GBP77.6 million, plus the
Intercompany Loan Reimbursement, expected to total GBP6.9 million,
which represents an equity value of GBP84.5 million, to be
satisfied in cash. This reflects an enterprise value of GBP107.7
million, with adjustments made for cash and debt like items.
In addition, the Company announces its intention to transfer the
Company's listing from the Premium Listing segment of the Main
Market of the London Stock Exchange to the Standard Listing
segment.
The Board also intends to introduce an Executive Remuneration
Scheme which will facilitate certain incentive entitlements for its
Executive Directors that fall outside the scope of the Company's
current remuneration policy.
The Disposal, the Proposed Transfer and the implementation of
the Executive Remuneration Scheme are all subject to approval of
the Company's shareholders at the General Meeting. The Circular,
convening the General Meeting, will be published and notified to
Shareholders shortly.
Pursuant to an agreement between the Purchaser and the Seller in
relation to the Disposal (the "Disposal Agreement"), the Seller has
conditionally agreed that it will dispose of Esken Renewables to
the Purchaser. Esken Renewables is the United Kingdom's largest
supplier of waste wood fuel, with contracts in place to supply
c.1.7 million tonnes of waste wood fuel to dedicated biomass plants
across the United Kingdom. The Disposal will be satisfied in cash
and the net proceeds of the Disposal are expected to be GBP78.5
million (which includes the Intercompany Loan Reimbursement and is
net of transaction costs).
The sale of Esken Renewables constitutes a class 1 transaction
pursuant to the Listing Rules and as such requires the approval of
Shareholders at a General Meeting. The Proposed Transfer and the
proposed Executive Remuneration Scheme also require prior approval
of Shareholders at a General Meeting. A notice of the General
Meeting, at which Shareholder approval will be sought for, inter
alia, the Disposal, the Proposed Transfer and the Executive
Remuneration Scheme, will be set out in the Circular.
Background to and reasons for the Disposal
As previously announced, Esken conducted a strategic review of
its operating businesses, which concluded that it was in the best
interests of all stakeholders to secure the long-term potential of
these businesses and deliver value for Shareholders through a
managed disposal process.
The Board is now pleased to announce the proposed conditional
disposal of Esken Renewables.
The Board believes that the Disposal will allow Esken Renewables
to benefit from having a long-term strategic owner to support its
growth ambitions through the expertise, resources and access to
capital of the Purchaser. It will also crystallise value for
Shareholders and precipitates the repayment and closure of the debt
drawn under the Facilities Agreement and will thus significantly
reduce the Continuing Group's debt financing costs going forwards.
It will also be used for working capital in the short term.
The Board believes that the Disposal is in the best interests of
the Company and its Shareholders for the following reasons:
-- It is in line with the strategy to deliver value to Shareholders;
-- Following an extensive competitive sales process in a
difficult market, the Disposal has been achieved at a purchase
price which unlocks value for Shareholders and will allow for the
repayment and closure of the committed funding under the Facilities
Agreement;
-- It supports the Continuing Group's strategy to reduce existing indebtedness;
-- It provides for an immediate injection of cash into the
Continuing Group to facilitate the managed reduction of the
Continuing Group's support functions, to contribute to the Group's
defined benefit pension scheme, and to fund working capital and
other financial obligations in the near term; and
-- It provides for increased financial stability of the Continuing Group so as to support:
(i) the finalisation and entry into a potential GBP20 million
funding facility from certain of Esken's larger Shareholders into
Esken Aviation, as holding company of the LSA Group ("Potential
GBP20 million LSA Facility");
(ii) the entry into binding documentation for the disposals of
the non-core assets of Pollington and Port of Weston, in which the
Group has entered into a non-binding heads of terms for aggregate
cash consideration of GBP8.5 million (the "Heads of Terms for
Pollington and Port of Weston");
(iii) a potential renegotiation of the terms and/or deferral of
the maturity of the Exchangeable Bond beyond 8 May 2024; and
(iv) a managed sale process of the Continuing Group's remaining
core operating division (being the LSA Group) as well as its
non-core assets, with a view to ultimately returning remaining
available value to Shareholders.
Information on the Purchaser
The Purchaser is a vehicle fully owned and funded by the
sustainable infrastructure fund, Pioneer Infrastructure Partners
SCSp, managed by Pioneer.
Summary of key terms of the Disposal
The Seller has agreed to sell the entire issued share capital of
Esken Renewables for consideration of GBP77.6 million plus the
Intercompany Loan Reimbursement, expected to total GBP6.9 million,
which represents an equity value of GBP84.5 million, to be
satisfied in cash. This reflects an enterprise value of GBP107.7
million, with adjustments made for cash and debt like items.
The net proceeds of the Disposal are expected to be GBP78.5
million ( which includes the Intercompany Loan Reimbursement and is
net of transaction costs).
The Seller has given certain warranties and indemnities to the
Purchaser, further details of which will be set out in the
Circular.
Completion is conditional upon, inter alia: the passing of the
Disposal Resolution at the General Meeting to be convened by the
Company; the Deed of Settlement and Variation being duly executed
by Esken Renewables and TGP, being the settlement of certain
matters and variation of the fuel supply agreement with one of
Esken Renewables' key customers; and the satisfaction or waiver of
the Cash Sweep Condition.
In the event that the Disposal is not approved at the General
Meeting prior to the Longstop Date, being eight weeks from the date
of the Disposal Agreement, the Purchaser would be entitled to a
break fee under the Disposal Agreement up to a maximum aggregate
amount of GBP276,000.
Financial Information on Esken Renewables
The financial information on Esken Renewables contained in this
paragraph has been extracted, without material adjustment, from the
financial information table on Esken Renewables for the three years
ended 28 February 2023 (Historical Financial Information Relating
to Esken Renewables), full details of which will be contained in
the Circular.
2023 2022 (4) 2021 (4)
(GBP'000) (GBP'000) (GBP'000)
Revenue
..................................................
.............. 93,748 79,650 75,019
Adjusted EBITDA(2)
................................................ 18,340 20,399 10,108
Profit / (loss) before tax(3)
...................................... 7,927 3,690 (704)
Notes:
(1) The income statements presented above are unaudited.
(2) Adjusted EBITDA represents profit/(loss) before interest, tax on profits,
depreciation
amortisation, impairments and the addback of certain intra-group costs.
(3) Includes impairments, which totalled GBP(1.0) million in the financial year ended
28 February
2023, GBP(6.8) million in the financial year ended 28 February 2022, and GBPnil in the
financial
year ended 28 February 2021. Excludes intra-group branding charges, which totalled
GBP(1.0)
million in the financial year ended 28 February 2023, GBP(0.6) million in the financial
year
ended 28 February 2022, and GBP(0.8) million in the financial year ended 28 February
2021.
(4) Values inclusive of prior year adjustment made as part of the 2023 audit - see the
Group's
annual report and accounts for the financial year ended 28 February 2023 available on
Esken's
website ( www.esken .com ) for further details.
As at 28 February 2023, Esken Renewables had audited total
assets of GBP97.6 million and net assets of GBP33.5 million.
After 28 February 2023, as part of the Disposal, the Group will
transfer certain of its properties (being its office, processing
site and estate access road in Widnes) to Esken Renewables, as
these are properties that were and continue to be used
predominantly by Esken Renewables rather than any other member of
the Group. These transfers release the Group from the ongoing lease
liability for the Widnes office and processing site, and remove the
Group's ongoing maintenance liability in relation to the Widnes
estate access road.
Financial effects of the Disposal and use of proceeds
Financial effects of the Disposal
As Esken holds 100 per cent. of Esken Renewables, the Group's
consolidated accounts include Esken Renewables.
Following Completion, the Continuing Group will no longer
receive the profitable contribution that Esken Renewables currently
makes to the Group's financial results. Further information on the
financial effects of the Disposal, including pro-forma financial
information, will be set out in the Circular. In the Group's
forthcoming interim results for the six month period ending 31
August 2023, which are due to be published by 30 November 2023,
Esken Renewables will be reclassed as a disposal group held for
sale and a discontinued operation.
Use of proceeds
The net proceeds of the Disposal are expected to be GBP78.5
million ( which includes the Intercompany Loan Reimbursement and is
net of transaction costs).
The net proceeds receivable by the Seller will be used by the
Continuing Group to immediately repay the GBP55 million of
committed funding drawn under the Facilities Agreement and
associated costs ( based on the Company's latest calculation, the
amount to settle will be GBP70.6 million in total). The balance of
the net proceeds will be used: (i) to further contribute
approximately GBP3.6 million to the Group's defined benefit pension
scheme, which the Board expects to be sufficient to fund the scheme
through buy-in, buy-out and wind up; and (ii) to provide additional
working capital in the short term.
The residual net cash of the Disposal, together with any
consideration from the anticipated disposal of certain of the
Continuing Group's non-core assets, will increase the financial
stability of the Continuing Group in the short term thus supporting
it: (i) to finalise the Potential GBP20 million LSA Facility into
Esken Aviation to provide certain funds as necessary to support the
recovery of LSA and allow a managed sale process; (ii) to enter
into binding documentation for the disposals of the non-core assets
of Pollington and Port of Weston; and (iii) to potentially
renegotiate the terms and/or deferral of the maturity of the
Exchangeable Bond beyond the current maturity date of 8 May
2024.
Group Strategy of the Continuing Group
Following the Disposal, the Continuing Group will comprise: (i)
Esken Aviation, principally comprising the LSA Group; and (ii)
non-core assets.
The strategy of the Continuing Group (which assumes the Disposal
will complete) is as follows:
-- to provide support, including, inter alia, by means of the
Potential GBP20 million LSA Facility into Esken Aviation currently
being negotiated by the Board, for the ongoing recovery of
passenger growth at LSA while continuing the managed sale process
to secure a new owner for the LSA Group;
-- to dispose of its remaining non-core assets;
-- to potentially renegotiate the terms and/or deferral of the
maturity of the Exchangeable Bond beyond the current maturity date
of 8 May 2024, and to subsequently repay and close out the
Exchangeable Bond when it becomes due;
-- to settle all remaining outstanding liabilities; and
-- in time, once sufficient assets have been realised, to seek a
managed sale process of any of the remaining assets of the
Continuing Group and return remaining value to Shareholders.
The Board is discussing heads of terms with certain of Esken's
larger Shareholders in respect of a Potential GBP20 million LSA
Facility into Esken Aviation, as holding company of the LSA Group.
If Esken is successful in securing this facility, the proceeds are
intended to provide funding support for the operations at LSA
including capital expenditure. The Potential GBP20 million LSA
Facility is expected to receive a priority return and repayment
from the proceeds of the sale of the airport after redemption of
the Group's convertible debt facility, provided by Carlyle Global
Infrastructure Fund L.P ("CGI") (the "Convertible Debt Facility")
at that time. Upon completion of the Disposal, the Board will seek
to finalise the Potential GBP20 million LSA Facility and enter into
a binding agreement. It is currently envisaged that this would
occur once the Continuing Group has completed the Proposed
Transfer. The Board is also seeking to bring forward the commitment
of a tranche of this facility in the near term. At this stage,
there can be no guarantee that the Potential GBP20 million LSA
Facility or any tranche thereof will be agreed.
Esken has entered into the non-binding Heads of Terms for
Pollington and Port of Weston for cash consideration of GBP3.5
million and GBP5.0 million, respectively. It is currently envisaged
that the Board would enter into binding documents and complete the
disposals in respect of these non-core assets shortly after the
Continuing Group has completed the Proposed Transfer. There can be
no guarantees that the disposals will complete within any time
frame or at all, or, if they do, on what terms, but it is intended
that the proceeds will be used for additional working capital and
to extend the liquidity headroom of the Continuing Group.
With the benefit of, amongst other things, the Potential GBP20
million LSA Facility, the disposal of non-core assets for GBP8.5
million in aggregate in the near term, and the potential
renegotiation of the Exchangeable Bond, it is anticipated that the
Continuing Group will continue to operate as a going concern
(noting that the Group's 2023 Annual Report and Financial
Statements contained a material uncertainty in respect of going
concern to which the auditor drew attention by way of emphasis
without modifying their report).
As previously announced, the Board has concluded that the
interests of all stakeholders would be best served by seeking a new
owner for the LSA Group through a managed sale process. The LSA
Group would benefit from a long term strategic owner with access to
capital to support its growth ambitions given the increase in
passenger demand in the London market, while offering stability and
certainty to its staff, customers and suppliers.
The process to seek a new owner for the LSA Group is underway.
While early in the process, the Board has been encouraged by the
initial level of interest from a range of parties who recognise the
long-term strategic value of LSA. However, the certainty, value and
timing of any such disposal of the LSA Group cannot be determined
at this stage. The market for aviation has improved significantly
recently with strong passenger demand experienced and a return to
pre-pandemic passenger levels by other London airports during the
summer season which, as a result, are increasingly capacity
constrained, impacting both airline and passenger growth.
Negotiations continue with multiple prospective airlines to meet
the continued passenger demand and, in turn, accelerate the
trajectory of LSA on its journey back to at least 2.2 million
passengers (2019 level) in the medium term and then to
approximately 5 million beyond, given the Board's estimate of LSA's
capability to handle that level of passengers, with a compelling
investment case for the incremental capital expenditure
required.
Assuming that the Company successfully concludes (i) the
Disposal, (ii) the sale of the LSA Group, (iii) the disposal of the
non-core assets of the Continuing Group and addresses the dedicated
ground handling team at LSA (if not sold as part of an LSA Group
disposal), (iv) the closure of the Exchangeable Bond, and (v)
settlement of any of the Continuing Group's material remaining
liabilities, the Board's intention would be to return remaining
value to Shareholders, seek to delist the Company from the London
Stock Exchange and to conclude the winding down of the Continuing
Group.
Proposed Transfer
The Board is mindful that, following the Disposal, the
Continuing Group will be smaller and that the strategy to sell its
remaining assets, including the LSA Group, and repay or settle
outstanding liabilities will further reduce the size of the
Continuing Group.
The Board also wishes to reduce ongoing costs for the Continuing
Group and believes that a transfer of listing from a Premium
Listing to a Standard Listing will assist in that, as it will
reduce some of the Company's ongoing costs of compliance. Whilst
the Proposed Transfer will mean that the Company will no longer be
required to comply with the super-equivalent provisions of the
Listing Rules that apply to companies with securities admitted to
the Premium Listing segment of the Official List, the Board's
intention is that there will be no material governance changes as a
result of the Proposed Transfer.
Under the Listing Rules, the Proposed Transfer requires prior
approval of Shareholders by way of special resolution. Shareholders
will therefore be asked to vote on a special resolution relating to
the Proposed Transfer at the General Meeting (the "Transfer
Resolution"). If the Proposed Transfer does not occur because the
Transfer Resolution does not pass, the Company's Premium Listing
will continue. The date of the Proposed Transfer must not be less
than 20 business days after the passing of the Transfer Resolution
at the General Meeting. Details of the impact of the Proposed
Transfer on the Company and its continuing obligations under the
Listing Rules will be set out in the Circular.
Executive Remuneration Scheme
The Company has reflected on the remuneration required to retain
its Executive Directors for the period during which it intends to
implement its strategy for the Continuing Group. It has concluded
that certain incentive arrangements need to be put in place which
fall outside the scope of the Company's current remuneration
policy. It has further concluded that the existing long term
incentive plan in place in the Company, where performance is
assessed over a number of years, is no longer appropriate given the
strategy to dispose of the Continuing Group's assets and return
remaining value to Shareholders. These proposals relate to both
future annual bonuses, and future long-term incentive arrangements,
and are intended to directly align the management incentive
arrangements with returns to Shareholders from the disposal
processes referred to above and to aid in the retention of key
personnel to oversee implementation of the Continuing Group's
strategy.
Under the Listing Rules, the Executive Remuneration Scheme
requires prior approval of Shareholders by way of an ordinary
resolution. Shareholders will therefore be asked to vote on a
resolution relating to the Executive Remuneration Scheme at the
General Meeting, (the "Remuneration Resolution"). Further details
on the Executive Remuneration Scheme will be set out in the
Circular.
Current trading, trends and prospects of the Continuing
Group
Following the Star Handling Disposal, being the ground handling
operations at Manchester and Stansted airports, the aviation
related businesses of the Group are now entirely focused on the
recovery at LSA. The airport has benefitted during the summer
season from the industry's strong passenger demand which has seen
the other London airports return to pre-pandemic passenger levels.
The partnership with easyJet has seen the schedule grow from three
to eight destinations with increasing frequency and strong load
factors being experienced. This has encouraged easyJet to add
additional routes with Alicante, Amsterdam, Geneva and Paris and
most recently added, Grenoble to operate through the winter this
year.
Against this positive backdrop, discussions continue on an
expanded summer schedule for 2024 with a number of airlines who
recognise the growing capacity constraints at other London airports
and the strong offering from LSA in terms of operating cost and
passenger experience. For instance, a new route to Bourgas, in
partnership with Balkan Airlines, will start in summer 2024. These
new routes and airline partnerships are encouraging signs that
LSA's recovery is now underway. While signs are encouraging, the
aviation industry as a whole has not yet fully recovered from the
effects of the pandemic. As an extension to the growth in scheduled
routes, the Jet Centre continues to play an important role. The
Directors intend to pursue new prospects following the Jet Centre
open day in June .
The Board believes it now has a base from which to progress the
process to seek a new owner for the LSA Group. The decision taken
by the Board to sell the LSA Group, in order to crystallise
shareholder value and secure the right long-term partner best
placed to support future growth, has been reinforced by this market
momentum. While early in the process, the Board has been encouraged
by the initial level of interest from a range of parties who
recognise the long-term strategic value of LSA. The Board will be
focussing its engagement over the months ahead, with the objective
of achieving the best outcome for stakeholders.
In light of the strategic review triggering the managed sale of
the LSA Group, the estimated repayment date of the Group's
Convertible Debt Facility, provided by CGI, has been brought
forward. As required by IFRS 9, the Group has recalculated the
amortised cost of the financial liability leading to a one-off
adjustment through profit or loss, in addition to the monthly
interest charges. The Convertible Debt Facility has a maturity date
of 2028; however, a sale event before this maturity date
crystallises early repayment of the facility in full (principal
plus all interest amounting to GBP193.75 million in total). This
increased interest is a non-cash item and the debt liability will
be settled when the LSA Group is sold. There are no changes to the
terms of the Convertible Debt Facility. The increased one-off
non-cash interest charge is anticipated to total approximately
GBP29.4 million and will be included within the Group's forthcoming
interim results.
On 26 September 2023, Esken received notification that documents
filed by CGI in the High Court have been served on LSA, claiming
certain technical breaches by LSA with respect to the Convertible
Debt Facility. LSA does not agree with CGI's claimed interpretation
of the Convertible Debt Facility and intends to defend the action
vigorously. Esken will continue with its sale process to find the
right long-term owner for the airport.
Non-core assets
Following the completed disposal on 3 August 2023 of the
investment in Mersey BioEnergy for cash consideration of GBP9
million, discussions continue to progress the remaining non-core
assets with a view to realising value for Shareholders. Further to
this, the Group has recognised an impairment of approximately
GBP5.3 million on its non-core asset at Pollington, reflecting a
reduction in the assessment of the assets net realisable value in
light of ongoing negotiations, in respect of which Esken has now
entered into non-binding heads of terms, over a potential disposal
of Pollington and also Port of Weston (being the Heads of Terms for
Pollington and Port of Weston).
The remaining aircraft of the original eight leased by Propius
following the demise of the group of companies known as "Stobart
Air" was due to be returned to the lessor in October 2023. However,
due to supply chain challenges, the return is likely to be delayed
by a few months. Landing gear overhaul on one of the previously
returned aircraft agreed with the lessor will then bring to a
conclusion all guaranteed lease payments and return condition
obligations in connection with Propius. The final outcome is
expected to remain within the amounts previously provided in
Esken's annual report and accounts for the financial year ended 28
February 2023 being approximately GBP25 million and as at 31 August
2023 is expected to be approximately GBP5 million .
In line with the stated strategy for managed disposals and the
ultimate wind down of the Continuing Group, the Board has
undertaken a consultation with staff at Continuing Group level and
commenced the implementation of a phased redundancy plan to reduce
central costs as disposals are completed, with a GBP2.2 million
provision for redundancy costs to be included in the Group's
forthcoming interim results.
Group cash and cash equivalents as at 31 August 2023 was GBP26.9
million, comprising approximately GBP7.0 million held within Esken
Renewables and approximately GBP3.0 million of ring-fenced cash
held in LSA and its subsidiaries (all figures unaudited).
Current trading, trends and prospects of Esken Renewables
The challenges Esken Renewables experienced during the financial
year ended 28 February 2023 regarding biomass plant outages have
continued into the current financial year. Plant performance has
been behind expectations, with Esken Renewables exercising the
contractual take or pay provisions within its supply contracts
where applicable. The performance of the plants has now improved,
with all major plants currently having returned from any prolonged
unplanned outages.
Gate fees have also been subdued during the first half of the
year, although these are continuing to show signs of improvement,
with Esken Renewables being well stocked ahead of the upcoming
winter period.
These issues have been compounded by one-off settlements that
have been agreed with specific plants in relation to contractual
negotiations, in parallel with discussions to seek change of
control consents for the Disposal with the same counterparties,
which have impacted year to date profitability. Esken Renewables
has also been impacted by temporary deviation from the exclusive
supply agreement to a key customer, resulting in a reduction in
volumes supplied. The recent resolution of these discussions
resulted in a return to exclusivity in mid-October 2023.
General Meeting
The Disposal, the Proposed Transfer and the Executive
Remuneration Scheme are conditional upon, inter alia, the passing
at the General Meeting of the Disposal Resolution, the Transfer
Resolution and the Remuneration Resolution respectively.
The Disposal Resolution, the Transfer Resolution and the
Remuneration Resolution are independent resolutions and none is
conditional upon the passing of the other Resolutions. If any of
the Resolutions are passed, it will be implemented whether or not
the other Resolutions are passed.
The Circular is expected to be posted by the Company to its
Shareholders shortly which will contain a notice convening the
General Meeting.
Irrevocable Undertakings
The Company has received an irrevocable undertaking to vote in
favour of the Disposal Resolution and the Transfer Resolution at
the General Meeting in respect of 285,077,383 Ordinary Shares
(representing, in aggregate, approximately 27.8 per cent. of the
issued ordinary share capital of the Company).
Importance of vote
Shareholders will be asked to vote in favour of the Disposal
Resolution at the General Meeting in order for the Disposal to
proceed. If the Disposal Resolution is not passed by Shareholders,
the Disposal cannot complete and the Company will not receive the
net proceeds of the Disposal. The Directors believe that successful
completion of the Disposal is required, absent mitigating actions,
to fund the Continuing Group's short-term working capital
requirements and position the Continuing Group to deliver its
medium-term Group strategies.
Attention is drawn to the fact that completion of the Disposal
is conditional upon, amongst other things: the Disposal Resolution
being passed at the General Meeting; the Deed of Settlement and
Variation being duly executed; and the satisfaction or waiver of
the Cash Sweep Condition.
a. Impact of completion of the Disposal being delayed or the
Disposal not completing - Liquidity
As at 28 February 2023, the Group had cash balances of GBP50.3
million. Included in this cash figure was GBP5.3 million of cash
ringfenced in LSA and its subsidiaries. Group cash and cash
equivalents as at 31 August 2023 was GBP26.9 million, comprising
approximately GBP7.0 million held within Esken Renewables and
approximately GBP3.0 million of ring-fenced cash held in LSA and
its subsidiaries (all figures unaudited). Whilst the Group
continues to tightly manage its cash resources, the current
position is that the Group needs to complete the Disposal prior to
mid December 2023, complete other significant asset disposals or
obtain alternative sources of funding, in order to continue
trading.
The Company's auditor included a paragraph in the independent
auditor's reports in respect of each of the financial statements
for the years ended 28 February 2022 and 28 February 2023 stating
that there is material uncertainty in respect of the Company's
ability to continue as a going concern.
If the Disposal fails to complete by mid December 2023, this is
expected to lead to severe liquidity issues and ultimately the
administration of the Group, absent mitigating actions. The severe
liquidity issues, if no mitigating actions are taken, will lead to
a funding shortfall in respect of the LSA Group, which is expected
to occur from 22 December 2023.
Such a funding shortfall in respect of the LSA Group would, in
turn, permit CGI to accelerate the repayment of the Convertible
Debt Facility in an amount of GBP193.75 million, and thus would
also likely lead to a significant or total loss of the Group's
investment in LSA.
A failure to pay any debt over GBP10 million when due and
payable (including by way of acceleration) by LSA would also
trigger an event of default in relation to the Exchangeable Bond,
which would result in the Exchangeable Bond becoming due and
repayable if the trustee of the Exchangeable Bond (acting on
instructions) so declares.
As a result, the Company (as guarantor of the Exchangeable Bond)
and key trading companies in the Group would no longer be able to
operate as a going concern. In such circumstances, the Board or the
Group's lenders may resolve to place the Company and such key
trading companies into an administration process (or equivalent
local law procedures), as noted below.
b. Impact of completion of the Disposal being delayed or the
Disposal not completing - Facilities Agreement and consequent
effects
If the Disposal fails to complete by mid December 2023, in
addition to the funding shortfall in respect of the LSA Group from
22 December 2023, the Group will, in mid December 2023 likely
breach its covenants under the Facilities Agreement, absent any
mitigating actions. If the Disposal was to be delayed, the
Directors would have a limited amount of time to raise additional
funds, to allow the Group to continue trading. In such
circumstances, the lender under the Facilities Agreement will have
no obligation to waive the likely covenant breach and may not
consent to continue to provide funding to the Group - this may mean
that the Group would be unable to meet its liabilities as they fall
due.
In respect of those financial covenants, an event of default
would occur in mid December 2023 by reference to the prior month
covenants assessment of the Facilities Agreement (absent any
mitigation). In an event of default, the lenders under the
Facilities Agreement would be entitled to demand immediate
repayment of all principal amounts outstanding under the Facilities
Agreement (GBP55 million has been drawn as at 31 August 2023) and
associated costs (based on the Company's latest calculation, the
aggregate amount to settle is GBP70.6 million).
Unless the Group is able to agree short-term relief with the
lenders under the Facilities Agreement in order to explore
alternative funding options to refinance the Facilities Agreement,
or dispose of all or part of the business of the Group in order to
generate sufficient funds to repay the Facilities Agreement, the
Directors do not expect that the Group would be able to obtain the
funds necessary to pay all due amounts under the Facilities
Agreement in such circumstances. Administration (or equivalent
local law procedures) would therefore become a reasonably likely
outcome for the Company, and the key trading companies in the
Group, at that time.
Such a funding shortfall in respect of the LSA Group, would, in
turn, permit CGI to accelerate the repayment of the Convertible
Debt Facility in an amount of GBP193.75 million. A failure to pay
any debt over GBP10 million when due and payable (including by way
of acceleration) by LSA would trigger an event of default in
relation to the Exchangeable Bond. Enforcement action of the
transaction security granted in favour of the lenders under the
Convertible Debt Facility and the Exchangeable Bond could occur
thereafter. Shareholders would likely lose the benefit of all or a
substantial part of their investment in the Company and the LSA
Group as a result.
c. Mitigating actions
The Directors have a number of potential mitigating actions
available to them in the event that the Disposal does not
successfully complete by mid December 2023. These primarily
comprise: i) disposals of non-core assets, including potentially
bringing forward the Heads of Terms for Pollington and Port of
Weston for aggregate consideration of GBP8.5 million; (ii) seeking
the potential entry into waivers and/or amendments with the
relevant lenders under the Facilities Agreement, the Convertible
Debt Facility and/or the Exchangeable Bond, to the extent deemed
appropriate; (iii) seeking to bring forward the disposal of the LSA
Group; and/or (iv) seeking additional equity, debt and/or other
financing arrangements.
There is, however, a material risk that the aforementioned
potential mitigating actions will not be achievable in the required
timeframe to avoid administration (or equivalent local law
procedures) in the event that the Disposal does not successfully
complete by mid December 2023. In addition, as the Group has
already implemented significant cost savings, the Directors believe
that no further significant cost savings are likely possible.
A reasonable worst case scenario if the Disposal does not
complete by mid December 2023, and the lenders under the Facilities
Agreement consent to waive the likely covenant breaches of the
Facilities Agreement, is that the Group will, absent any
alternative solution, face liquidity constraints in mid February
2024 in addition to the Group facing a forecast funding shortfall
within the LSA Group from 22 December 2023.
Consequently, as noted above, if (i) the Disposal does not
successfully complete by mid December 2023, or (ii) the lenders
under the Facilities Agreement do not provide a waiver in respect
of the likely covenant breaches in mid December 2023 in respect of
the Facilities Agreement and no further funding is available, such
as from the aforementioned mitigating actions, the Directors expect
that administration (or equivalent local law procedures) of the
Company and of certain key trading companies in the Group,
including the LSA Group, and permit the potential enforcement of
the transaction security granted in favour of the relevant lenders
under the Facilities Agreement, the Convertible Debt Facility and
the Exchangeable Bond. Were the lenders to take such action,
Shareholders would likely lose all or a substantial part of their
investment in the Company as a result.
Accordingly, it is critical that Shareholders vote in favour of
the Disposal Resolution, as the Directors consider the Disposal to
represent the best possible transaction for Shareholders as a whole
in the current circumstances.
Even if the Disposal is approved by Shareholders, as further
disclosed in the 'Working Capital' paragraph below, management's
forecasts show a working capital shortfall in mid February 2024,
based on the residual net cash received from the Disposal and the
ongoing funding requirements of the Continuing Group, absent any
mitigating actions. This shortfall widens on 8 May 2024 as a result
of the requirement to repay the Exchangeable Bond on that date (and
assuming no refinancing or extension of the Exchangeable Bond).
Under the assumptions of the reasonable worst case scenario, and
prior to any mitigating actions, it is expected that this funding
shortfall would continue to increase on a 12 month horizon and
further continue thereafter.
Working Capital
(a) Background to regulatory approach to working capital disclosure
The requirement of the FCA's Listing Rules in regards this class
1 disposal is for the Company to make a statement that there is
sufficient working capital available to the Continuing Group for
its present requirements or, if not, how it proposes to provide for
the additional working capital needed.
There is guidance in relation to working capital from the FCA
contained in Primary Market Technical Note 619.1 that sits
alongside the Listing Rules. The technical note makes it clear that
an issuer has a binary choice - namely that, if it cannot make a
'clean' working capital statement, then it has to make a
'qualified' working capital statement. There is no middle ground.
The analysis of sufficiency of working capital is also required to
take into account a wide range of variables and sensitivities to
cover a reasonable worst case scenario.
Accordingly, the working capital disclosure set out below has
been included in consequence of Primary Market Technical Note
619.1.
(b) Working Capital
It is anticipated that Company will make the following statement
in the Circular, that in Company's opinion, taking into account the
debt facilities available to the Continuing Group and the net
proceeds of the Disposal, the working capital available to the
Continuing Group is not sufficient for its present requirements,
that is for at least the next 12 months from the date of the
Circular.
(c) Directors' perspectives
The above qualified working capital statement is in respect of
an anticipated working capital shortfall of the Continuing Group in
mid February 2024, based on the residual net cash received from the
Disposal and the ongoing funding requirements of the Continuing
Group, absent any mitigating actions. This shortfall widens on 8
May 2024, as a result of the required repayment of the Exchangeable
Bond on this date (and assuming no refinancing or extension of the
bond).
As detailed in the paragraph entitled Use of Proceeds above, the
net proceeds of the Disposal will predominantly be used to (i) meet
the repayment of the full monies borrowed under the Facilities
Agreement and associated costs which becomes mandatory upon
Completion (which would otherwise have become due in December
2025); (ii) contribute into the Group's defined benefit pension
scheme; and (iii) in the short term to provide additional working
capital.
The Exchangeable Bond is currently due to be repaid on 8 May
2024. The cash outflow for the Exchangeable Bond, with nominal
value of GBP53.1 million, is dependent on the value of the
offsetting listed share collateral held at the date of maturity,
valued at GBP7.2 million, as at 31 August 2023, which can either be
sold or included as part of the payment by the Group to
Exchangeable Bond holders by way of an in-specie distribution. The
Facilities Agreement (of which GBP55 million has been drawn down
and an additional GBP30 million is uncommitted) will cease to be in
effect and will no longer be available to the Continuing Group
following its repayment upon Completion of the Disposal.
Esken's aviation related businesses have GBP3.0 million of
ring-fenced cash, as at 31 August 2023, in the LSA Group. The
Continuing Group intends to provide, primarily by way of the
Potential GBP20 million LSA Facility, funding support for the
operations at LSA including capital expenditure. Due to the
structure of the Convertible Debt Facility, the LSA Group has
become a ringfenced asset and so the LSA Group cash balances are
not accessible for use by the remainder of the Continuing
Group.
The Directors have run stress tests and various downside
sensitivities on the Company's business plan to result in a
reasonable worst case scenario.
This scenario analysis indicates that the Continuing Group will
have a working capital shortfall in mid February 2024, based on the
residual net cash received from the Disposal and the ongoing
funding requirements of the Continuing Group, absent any mitigating
actions. This shortfall widens on 8 May 2024, as a result of the
required repayment of the Exchangeable Bond on this date (and
assuming no refinancing or extension of the bond). Under the
assumptions of the reasonable worst case scenario, and prior to any
mitigating actions, it is expected that this funding shortfall
would continue to increase on a 12 month horizon, and continue
thereafter.
Mitigating Actions
Upon Completion, the Directors intend to take various mitigating
actions to improve the Continuing Group's liquidity and which will,
in the opinion of the Directors, provide adequate liquidity
headroom so as to retain the Company as a going concern (noting
that the Group's 2023 Annual Report and Financial Statements
contained a material uncertainty in respect of going concern to
which the auditor drew attention by way of emphasis without
modifying their report).
(i) The Board is in active discussions to seek to dispose of
certain of the Continuing Group's non-core assets, which may give
rise to cash proceeds of up to GBP10.5 million (to be received
prior to February 2024). Contributing to this amount, the Board has
entered into the non-binding Heads of Terms for Pollington and Port
of Weston for aggregate consideration of GBP8.5 million. The Board
may seek to bring forward the disposals of the Continuing Group's
other non-core assets, if at an appropriate value, to generate
additional proceeds to supplement its liquidity profile;
(ii) Upon Completion of the Disposal, the Board will seek to
finalise and enter into a binding agreement with respect to the
Potential GBP20 million LSA Facility. It is currently envisaged
that this would occur once the Continuing Group has completed the
Proposed Transfer. The Board is also seeking to bring forward the
commitment of a tranche of this facility in the near term. In the
event that the Potential GBP20 million LSA Facility is made
available, the proceeds would be used to provide funding support
for the operations at LSA including capital expenditure;
(iii) In conjunction with other mitigating actions, the Company
intends to commence a process to seek a potential renegotiation of
the terms and deferral of the maturity of the Exchangeable Bond to
such future date as to ensure the sufficiency of working capital of
the Continuing Group beyond the current maturity date of 8 May
2024;
(iv) The Board has begun a sale process in respect of the
aviation related businesses of the Group, primarily the LSA Group;
and/or
(v) The Company would review all future funding and refinancing
options, which could include, but is not limited to, additional
equity, debt and/or other financing arrangements so as to ensure
the sufficiency of working capital of the Continuing Group. It is
currently anticipated by the Directors that the mitigating actions
in this paragraph (v) would only be undertaken in the event that
the mitigating actions in paragraphs (i) to (iv) above are not
sufficiently successful.
As is customarily the case, there can be no certainty that an
agreement will be reached for any of the above mitigating actions,
either in sufficient time or at all, or as to the terms and/or
quantum of any such transaction(s). It should also be noted that
none of the aforementioned mitigating actions are solely within
management control. However, the Directors currently consider that,
assuming a successful renegotiation of the Exchangeable Bond, and
as assisted by the potential disposal of certain of the Continuing
Group's non-core assets and the entry into the Potential GBP20
million LSA Facility, the anticipated net proceeds from the
intended LSA Group disposal will, and in sufficient time,
sufficiently exceed the funding shortfall of the Continuing Group
under the reasonable worst case scenario.
In the event that the aforementioned mitigating actions are not
able to be sufficiently employed, in time or at all, to generate
further working capital for the Continuing Group's requirements,
the Company and key trading companies in the Group would no longer
be able to operate as a going concern, in which case the Board may
resolve to place the Company and such key trading companies into an
administration process (or equivalent local law procedures).
Attention is also drawn to the paragraph entitled "Importance of
your vote" above, which sets out the consequences of the Disposal
Resolution not being approved by Shareholders at the General
Meeting, the Deed of Settlement and Variation not being duly
executed or the Disposal otherwise failing to complete, in which
event, there would be no Disposal proceeds and therefore no paydown
of the Facilities Agreement, and as such a covenant breach in
respect of the Facilities Agreement is anticipated to occur in mid
December 2023 (absent any mitigation), in addition to a potential
funding shortfall in the LSA Group from 22 December 2023. In such
circumstances, the Group's lenders may seek to put the Company and
key trading companies in the Group into an administration (or
equivalent local law procedures).
Definitions
The following definitions apply throughout this announcement,
unless the context requires otherwise:
"Board" or "Directors" the board of directors of the Company
"Carlyle" Carlyle Global Infrastructure Opportunity
Fund L.P.
"Cash Sweep" the extraction by the Seller of cash at
bank or in hand of Esken Renewables prior
to Completion, up to a maximum amount of
GBP5 million
"Cash Sweep Condition" the extraction by the Seller of cash at
bank or in hand of Esken Renewables prior
to Completion of GBP5 million
"CGI" CGIOF River S.À R.L. and its group
companies, including its parent undertaking
Carlyle Global Infrastructure Opportunity
Fund L.P.
"Circular" the circular to Shareholders in respect
of the Disposal, the Proposed Transfer
and the Executive Remuneration Scheme,
which is expected to be published shortly
"Company" or "Esken" Esken Limited (incorporated and registered
under the laws of Guernsey with registered
number 39117)
"Completion" completion of the Disposal
"Continuing Group" the Group following the Disposal
"Convertible Debt the convertible loan facility entered into
Facility" between Esken Aviation and CGI dated 2
July 2021
"Deed of Settlement deed of settlement and variation in respect
and Variation" of the fuel supply agreement for the Tilbury
Biomass project dated 23 March 2015, as
amended by a deed of variation dated 25
September 2017 and a settlement deed and
deed of variation dated 19 November 2020,
to be executed by the Company and TGP either
(i) in the agreed form (subject to any
amendments required of a typographical
nature or which are otherwise immaterial
to the obligations and rights of Esken
Renewables) or (ii) in a form agreed by
the Purchaser (acting reasonably) in writing
"Disposal" the proposed disposal of the entire issued
share capital of Esken Renewables
"Disposal Agreement" the conditional agreement between (1) the
Purchaser and (2) the Seller in relation
to the Disposal
"Disposal Resolution" the resolution relating to the Disposal
to be set out in the notice of General
Meeting at the end of the Circular
"Esken Aviation" Esken Aviation Limited (registered number
10756283) whose registered office is at
Third Floor, 15 Stratford Place, London,
England, W1C 1BE
"Esken Renewables" Esken Renewables Limited (registered number
07042490) whose registered office is at
Third Floor, 15 Stratford Place, London,
England, W1C 1BE
"Exchangeable Bond" GBP53.1 million of secured guaranteed exchangeable
bond placed by the Exchangeable Bond Issuer
"Exchangeable Bond Esken Finance plc (registered number: 11701416)
Issuer" whose registered office is at Third Floor,
15 Stratford Place, London, United Kingdom,
W1C 1BE
"Executive Directors" each of David Shearer, Executive Chairman
and Nick Dilworth, Chief Operating Officer,
Chief Financial Officer and Executive Director,
Esken Renewables
"Executive Remuneration the Esken Value Creation Plan 2023
Scheme" or "VCP"
"Facilities Agreement" the facilities agreement entered into by
the Company and certain of its subsidiaries
as borrowers and original guarantors on
9 November 2022
"FCA" the Financial Conduct Authority
"General Meeting" the general meeting of the Company, notice
of which will be set out in the Circular
"Group" the Company and its subsidiary undertakings
from time to time
"Heads of Terms for the non-binding heads of terms for disposals
Pollington and Port of the Group's non-core assets at Pollington
of Weston" and Port of Weston for cash consideration
of GBP3.5 million and GBP5.0 million respectively
"Intercompany Loan reimbursement of the intercompany loan
Reimbursement" owed by Esken Renewables to Esken by way
of (i) the Cash Sweep and/or (ii) repayment
of the intercompany loan balance in excess
of GBP5 million
"Listing Rules" the Listing Rules maintained by the FCA
from time to time pursuant to Part VI of
the Financial Services and Markets Act
2000
"London Stock Exchange" London Stock Exchange plc
"Longstop Date" the date that is eight weeks from the date
of the Disposal Agreement and defined as
the "Longstop Date" in the Disposal Agreement
"LSA" London Southend Airport
"LSA Group" London Southend Airport Company Limited,
Thames Gateway Airport Limited, London
Southend Solar Limited and London Southend
Jet Centre Limited
"Main Market" the Main Market of the London Stock Exchange
"Mersey BioEnergy" Mersey BioEnergy Holdings Limited (registered
number 09209582) whose registered office
is at C/O Bioenergy Infrastructure Limited
1650 Arlington Business Park, Theale, Reading,
United Kingdom, RG7 4SA
"Official List" the official list maintained by the FCA
in accordance with Section 74 of the Financial
Services and Markets Act 2000
"Ordinary Shares" ordinary shares of GBP0.10 each in the
capital of the Company
"Pioneer" Pioneer Infrastructure Partners SCSp, an
alternative investment fund, registered
in Luxembourg (number B247320), managed
by Pioneer Point Partners LLP (registered
number OC339088)
"Potential GBP20 million entry into a potential GBP20 million funding
LSA Facility" facility from certain of Esken's larger
Shareholders to Esken Aviation, as holding
company of the LSA Group
"Premium Listing" a listing of securities in the premium
listing segment of the Official List
"Propius" Propius Funding Limited (registered number:
14431338) whose registered office is at
Third Floor, 15 Stratford Place, London,
United Kingdom, W1C 1BE
"Proposed Transfer" the proposed change in the Company's listing
category from a Premium Listing to a Standard
Listing
"Purchaser" Pioneer Balmoral UK Limited (registered
number 15049609), whose registered office
is at Forum 4 Parkway, Whiteley, Fareham,
Hampshire, United Kingdom, PO15 7AD
"Remuneration Resolution" the resolution relating to the Executive
Remuneration Scheme to be set out in the
notice of General Meeting at the end of
the Circular
"Resolutions" the resolutions to be set out in the notice
of General Meeting at the end of the Circular,
being the Disposal Resolution, the Transfer
Resolution and the Remuneration Resolution
"Seller" Esken Holdings Limited (registered number
07246663), whose registered office is at
Third Floor, 15 Stratford Place, London,
England, W1C 1BE, a subsidiary of the Company
"Shareholders" holders of Ordinary Shares
"Skytanking" Skytanking UK Ltd (registered number: 14342927)
whose registered office is at 5th Floor
10 Finsbury Square, London, United Kingdom,
EC2A 1AF
"Sponsor" Canaccord Genuity Limited, which is authorised
and regulated by the Financial Conduct
Authority
"Standard Listing" a listing of securities in the standard
listing segment of the Official List
"Star Handling Disposal" the sale of the entire share capital of
Skytanking Aviation Services Eng Limited
(registration number: 10818963 and previously
named "Star Handling Limited") by Esken
Aviation to Skytanking on 15 May 2023
"TGP" Tilbury Green Power Limited
"Transfer Resolution" the resolution relating to the Proposed
Transfer to be set out in the notice of
General Meeting at the end of the Circular
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November 01, 2023 04:38 ET (08:38 GMT)
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