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.
6 March 2024
ESKEN LIMITED
("Esken" or the "Company")
Update on the
future of the Company
Further to the announcement issued on
19 February 2024, Esken, the aviation group, announces that the
board of the Company has negotiated and agreed the launch of a
restructuring plan (pursuant to part 26A of the Companies Act 2006)
with Cyrus Capital Partners ("Cyrus") (the majority holder of the
exchangeable bond of £53.1 million which matures on 8 May 2024)
following the recapitalisation proposal entered into between its
wholly owned subsidiary London Southend Airport ("LSA"), Carlyle
Global Infrastructure Fund ("CGI") and Cyrus on 16 February
2024.
As a result, the Company has agreed to
accede to that recapitalisation proposal in relation to LSA. This
will therefore proceed on a consensual basis, rather than through a
contested court process, which could be potentially destructive for
all stakeholders. The terms of the recapitalisation proposal for
LSA involves a conversion of the convertible loan of £193.75
million due to CGI into an 82.5% stake in LSA and a similar
conversion of the £24.3 million debt due by LSA to Esken Aviation
Limited ("EAL"), a wholly owned subsidiary of the Company, into a
17.5% stake. Funding of the proposal agreed with the board of LSA
includes an initial £5 million of short-term unsecured bridge
funding to the airport through to the conclusion of the process as
part of a commitment of £32 million of new funding to secure the
future growth of the airport.
The terms of the proposed
restructuring plan for Esken, which will require a court process
and is expected to complete after the LSA recapitalisation process,
would involve amongst other things an equitisation of the
exchangeable bond, and certain other creditors within the Group,
and a delisting of the shares on the London Stock Exchange. The
expectation is that any return for shareholders at the end of the
process is likely to be negligible. Cyrus will provide liquidity to
the Esken group to meet its working capital needs during this
process and to allow an orderly wind down of the remaining
group.
While the board had previously
announced
its intention to (i) dispose of certain non-core assets
for a consideration of £8.5 million (ii) conclude a new £20 million
funding facility from certain of Esken's larger shareholders into
EAL and (iii) amend and extend the exchangeable bond with the
intention of providing liquidity for a period of two years to allow
a recovery of the airport to a point when it could be sold to repay
CGI, the exchangeable bond and return any excess value to
shareholders, all progress was stopped in light of recent events,
as set out in our previous announcements. As a consequence, while
there could have been the opportunity to pursue other sources of
finance given more time, Esken did not have access to the financial
resources to sustain it through what would have involved a
protracted court battle. The board has a responsibility to its
creditors to ensure that it follows the appropriate course of
action in these circumstances.
The court process for the Esken
restructuring plan is likely to take several months to conclude
but, in the meantime, the future funding of LSA is secure and the
board will progress the orderly wind down of the remaining group.
Once the documents for the restructuring plan are finalised a
further update will be provided when the process and timings will
be set out fully.
Enquiries:
Esken
Limited c/o Teneo
Teneo
Olivia Peters
+44 7902 771008
esken@teneo.com