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.
19 February 2024
ESKEN LIMITED
("Esken" or the "Company")
Update on LSA
and Carlyle Global Infrastructure Fund
Further to the announcement issued on
5 February 2024, Esken, the aviation group, announces that the
board of the Company's wholly owned subsidiary, London Southend
Airport Company Limited ("LSA"), together with its advisors, has
negotiated a recapitalisation proposal with Carlyle Global
Infrastructure Fund ("CGI") which will be funded by CGI and Cyrus
Capital Partners ("Cyrus") (the majority holder of the exchangeable
bond) as a solution to the dispute in respect of the convertible
loan between CGI and LSA.
In order for the recapitalisation
proposal to proceed on a consensual basis, Esken and its wholly
owned subsidiary Esken Aviation Limited ("EAL") (as the parent and
intermediate holding company to LSA) would have to accede to this
proposal by 4 March 2024. Esken, together with its advisors, is
urgently reviewing and assessing the terms and potential financial
impact of the recapitalisation proposal on the Company and its
wider stakeholders and will then decide whether to accept the terms
of the recapitalisation proposal.
The recapitalisation proposal includes
a commitment by LSA to make an application to court for a
restructuring plan under part 26A of the Companies Act 2006, absent
Esken and EAL agreeing to the terms of the recapitalisation
proposal. Esken understands that the terms of the proposed
recapitalisation proposal, whether implemented via a restructuring
plan or consensually, would amongst other things result in EAL's
shareholding in LSA being significantly reduced to a minority
interest. Funding of the proposal agreed with the board of LSA
includes support from both CGI and Cyrus to secure the future of
the airport.
A restructuring plan is a court
process which can, if the court so decides and various other
criteria are met, amongst other things cancel existing
shareholdings and issue new shares to different parties so as to
achieve a change in ownership of LSA. Esken is considering whether
the terms of LSA's recapitalisation proposal are acceptable or
whether it will contest LSA's restructuring plan through the
courts.
The uncertainty that CGI's demand for
repayment by LSA has created, has stalled any progress on (i) the
disposal of non-core assets (ii) the potential £20 million funding
facility from certain of Esken's larger shareholders into EAL and
(iii) the amendment and extension of the exchangeable bond, all as
referred to in previous announcements, until the position becomes
clear.
In parallel with its assessment of the
recapitalisation proposal for LSA, discussions are continuing with
Cyrus, as majority holder of the exchangeable bond, to understand
the impact of such recapitalisation proposal on the exchangeable
bond and which may include a restructuring of Esken. These
discussions include the provision of additional liquidity to Esken
and its subsidiaries.
There can be no certainty that any of
these discussions will lead to a consensual agreement, but Esken
believes that a consensual outcome would be in the interests of all
parties and will take all reasonable steps to facilitate such an
outcome. The Company is also undertaking contingency planning,
including exploring access to alternative funding to cover its
liquidity needs. The recapitalisation proposal, if agreed to by the
Company or imposed on it by the courts, could have a material
adverse impact on the Group.
Enquiries:
Esken
Limited c/o Teneo
Teneo
Olivia Peters
+44 7902 7701008
esken@teneo.com