REG - Esken Limited - AGM Update

EskenAnnouncement

30/08/2023 07:00

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RNS Number : 7234K  Esken Limited  30 August 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.

 

30 August 2023

 

ESKEN LIMITED

('Esken' or "the Group')

 

AGM Update

 

Esken, the Aviation and Renewables group, issues the following update ahead of
its AGM which will be held at 10am this morning.

 

As previously announced, we have completed the strategic review of our
operating businesses and are now progressing with the sale of our core
operating businesses and residual non-core assets through a managed disposal
process with a view to returning any remaining value to Esken shareholders.

 

Renewables

 

Our process with the preferred bidder to acquire the Renewables division is
significantly advanced and is progressing with a view to concluding an
agreement, subject to shareholder approval shortly. While this is slightly
later than originally envisaged, the Board currently considers that the
Group's liquidity headroom remains sufficient to continue with the plans
following the Group's strategic review.

 

The challenges Esken Renewables experienced during the financial year ending
28 February 2023 regarding biomass plant outages have continued into the new
financial year but there are now signs of an improvement in gate fees and
plant performance is expected to improve during the second half of the
financial year.

 

Aviation

 

Following the sale of Star Handling in May 2023 the Aviation Division now
comprises London Southend Airport (LSA) and a small ground handling operation
dedicated to supporting 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 3 destinations to 7 with increasing
frequency and strong load factors being experienced. This has encouraged
easyJet to add additional routes with Alicante, Amsterdam, Geneva and Paris 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 London airports and the strong offering from LSA in terms of
operating cost and passenger experience. The Jet Centre has also continued to
see positive traction in demand for its services.

 

The decision taken by the Esken Board to sell the airport 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, we have been encouraged by the initial level of
interest from a range of parties who recognise the long-term strategic value
of LSA. We will be focussing our engagement over the months ahead, with the
objective of achieving the best outcome for stakeholders.

 

Non-core operations

 

The previously announced sale of the interest in the Mersey Biomass Energy
plant completed on 3 August 2023 with the Group receiving proceeds of £9m.
Discussions continue to progress on the remaining non-core assets with a view
to realising value for shareholders.

 

The remaining two aircraft of the original eight leased by Propius following
the demise of Stobart Air are due to be returned to the lessor by mid-October.
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
will be within the amounts previously provided in the accounts.

 

In line with the stated strategy for managed disposals and the ultimate wind
down of the Group, we have undertaken a consultation with staff at Group level
and commenced the implementation of a phased redundancy plan to reduce central
costs as disposals are completed.

 

Looking ahead, the Board's focus is on completing the disposal of the
Renewables division to reduce debt and provide support to the growth of LSA as
we progress the discussions to achieve a sale of this key strategic asset.

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