REG - Esken Limited - Update on LSA & Carlyle Global Infrastructure Fund

EskenAnnouncement

05/02/2024 07:00

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RNS Number : 9463B  Esken Limited  05 February 2024

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.

5 February 2024

ESKEN LIMITED

("Esken" or the "Company")

Update on LSA and Carlyle Global Infrastructure Fund

Further to the announcement issued on 23 January 2024, Esken, the aviation
group, announces that its wholly owned subsidiary London Southend Airport
Company Limited ("LSA") has, in conjunction with its legal advisers,
investigated the validity of the alleged breaches of the convertible loan
agreement entered into between LSA and Carlyle Global Infrastructure Fund
("CGI").

LSA has concluded that there is no default or event of default which gives CGI
a current right to accelerate the loan, make demand or take enforcement action
pursuant to the convertible loan agreement. LSA has therefore disputed CGI's
claimed acceleration and demand for early repayment. Esken fully supports
LSA's position. As previously noted there have been no payment defaults by LSA
in relation to the convertible loan agreement and LSA cashflow has been in
line with expectations.

Notwithstanding Esken and LSA's robust position in relation to CGI's claimed
acceleration and demand for early repayment, and in order to avoid costly
litigation and unnecessary value destruction for all stakeholders (including
CGI), Esken will be submitting a proposal to CGI with a view to reaching a
negotiated settlement of the claims and thus a lifting of the claimed
acceleration and demand for early repayment.

The uncertainty of the outcome of the above has led to progress on (i) the
disposal of non-core assets; (ii) the potential £20 million funding facility
from certain of Esken's larger Shareholders into Esken Aviation and (iii) the
amendment and extension of the exchangeable bond, all as referred to in
previous announcements, being disrupted significantly, with these transactions
proceeding more slowly than anticipated and the terms for which may now be
different than those which the Company was previously hoping to achieve. These
actions were being taken to give the Group a funding horizon through to the
end of 2025 in order to allow a managed sale process of LSA as it recovers. A
successful sale of LSA would see CGI repaid as a priority and ahead of its
maturity date.

The Company is monitoring the impact of such delays and assessing appropriate
contingency planning, including exploring access to alternative funding to
cover these delays. If the Group is unable to resolve the dispute with CGI and
the Group is either unable to progress the transactions mentioned above or
find alternative funding in the coming months, then this could have a material
adverse impact on the Group.

 

Enquiries:

Esken Limited    C/o Teneo

 

Teneo

Olivia Peters

+44 7902 7701008

esken@teneo.com

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