Esken sells renewables division in deal valued at £107m

Esken Renewables

Esken, the Widnes-based aviation and renewables group, has announced the sale of its renewables division to Pioneer Balmoral UK

It said the deal represents an equity value of £84.5m, to be satisfied in cash, which reflects an enterprise value of £107.7m, with adjustments made for cash and debt-like items.

Net proceeds of the disposal are expected to total £78.5m – which includes the intercompany loan reimbursement and is net of transaction costs – which will be used to immediately repay the £55m of committed funding drawn under the facilities agreement and associated costs.

Based on the company’s latest calculation, the amount to settle will be £70.6m in total.

The balance of the net proceeds will be used to further contribute approximately £3.6m to the group’s defined benefit pension scheme, and to provide additional working capital in the short term for Esken, formerly the Stobart Group.

The group, which is in the process of winding down the business, revealed on Monday that it was in talks with Pioneer over a possible disposal, which Esken says will provide it with increased financial stability to support the previously announced managed sale of London Southend Airport (LSA).

While early in the process, the board said it has been encouraged by the initial level of interest from a range of parties who recognise the long term strategic value of LSA;

The disposal of the renewables business is expected to complete in early December 2023.

Esken executive chairman, David Shearer, said: “I am pleased to be able to announce the sale of our renewables business today.

“It is almost a year since the board announced that we would undertake a strategic review of the core operations of the group. Since then, we have worked with advisers on a comprehensive process to find the right strategic partner for the renewables business going forward. I am pleased that, in Pioneer, we have found such a partner and wish the proposed new owners, as well as the management team and staff, good luck for the future.”

He added: “The sale of Esken Renewables is a positive outcome set against a persisting challenging market with an increase in interest rates over the last 12 months that has suppressed M&A activity.

“Following this sale, and subsequent repayment of our debt facility, our focus will now primarily turn to addressing the maturity and terms of the Exchangeable Bond, and to the sale of LSA, to facilitate a managed process to realise value for shareholders.”

Pioneer Balmoral, based in Fareham, Hampshire, was incorporated on August 4, 2023. Its two named directors are Sebastian Edward Gregory Hung Kai Miller, and Subbash Chandra Thammanna.

It is part of London-based infrastructure investor, Pioneer Point Partners.

Esken also announced today that it intends to transfer the company’s listing from the Premium Listing segment of the Main Market of the London Stock Exchange to the Standard Listing segment.

The board also intends to introduce a new executive remuneration scheme which it said will facilitate certain incentive entitlements for its executive directors that fall outside the scope of the company’s current remuneration policy. Esken will seek shareholder approval to implement the executive remuneration scheme.

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