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

EskenAnnouncement

23/01/2024 07:00

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RNS Number : 5341A  Esken Limited  23 January 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.

23 January 2024

ESKEN LIMITED

("Esken", "Company" and/or "the Group")

Update on LSA and Carlyle Global Infrastructure Fund

Esken, the aviation group, announces that, further to the announcement issued
on 26 September 2023 and the circular issued on 6 November 2023 (the
"Circular"), on 19 January 2024 its wholly owned subsidiary London Southend
Airport Company Limited ("LSA") submitted its defence in relation to a court
claim by Carlyle Global Infrastructure Fund ("CGI") alleging a technical
breach by LSA with respect to the convertible loan agreement entered into
between LSA and CGI. Esken is confident that LSA has a robust position in
relation to the CGI claim.

LSA has subsequently received notification that CGI is alleging a number of
further breaches by LSA with respect to the convertible loan agreement and
that CGI has issued an acceleration notice to LSA, demanding repayment of the
loan in the amount of £193.75 million by 16 February 2024. The convertible
loan has a maturity date of August 2028. There have been no payment defaults
by LSA in relation to the convertible loan agreement and LSA cashflow has been
in line with expectations. Esken and LSA are investigating the validity of
the alleged breaches in conjunction with advisers.

Esken believes that any such acceleration would have significant adverse
implications for LSA, the Group and the Exchangeable Bondholders (as further
set out in the Circular) as it would be value destructive for all
stakeholders, including CGI itself. Esken is disappointed that CGI has chosen
to take this action based on purported technical defaults, as Esken had viewed
CGI as a long-term partner in the continued development of the airport. Esken
and LSA will be engaging with CGI to resolve the present issues.

LSA is an attractive strategic airport asset in the medium term as aviation
markets and the airport continues to recover from the unprecedented effects of
the COVID-19 pandemic. The board of Esken believes that there is considerable
value in the LSA business and continues to support its liquidity needs in line
with the recovery plan. As a result, LSA continues to meet its obligations as
they fall due.

As previously announced, Esken is making good progress in addressing the
maturity and terms of the Exchangeable Bond and towards the sale of its
non-core assets. In addition, Esken continues to focus on seeking a new owner
for LSA, with a view to crystallising shareholder value through securing the
right long-term partner, which recognises the inherent strategic opportunity
and is best placed to support future growth. A successful outcome to the sale
process would in any event repay the convertible loan instrument ahead of its
maturity date.

Enquiries:

Esken Limited    C/o Teneo

 

Teneo

Olivia Peters

07902 7701008

esken@teneo.com

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