Esken to appoint administrators, saying restructuring plan is not commercially viable
Esken, the Widnes-based aviation group, is to appoint administrators and has suspended trading in its shares with immediate effect.
Earlier this month the former Stobart Group which is registered in Guernsey said it had settled its long running dispute with Carlyle Group over the funding of its London Southend Airport asset.
It said it had agreed to a restructuring plan Cyrus Capital Partners, the majority holder of the exchangeable bond of £53.1m which matures on May 8, 2024, following a recapitalisation proposal agreed with Carlyle in February 2024.
The terms of the recapitalisation proposal for LSA involves a conversion of the convertible loan of £193.75m due to CGI into an 82.5% stake in LSA and a similar conversion of the £24.3m debt due by LSA to Esken Aviation Limited, a wholly owned subsidiary of the company, into a 17.5% stake.
But today, in an announcement on the stock exchange, Esken said that, following detailed advice from advisors, implementation of the proposed restructuring plan has ceased to be commercially viable.
It said: “While restructuring plans are becoming more common for English registered companies, additional issues arise under Guernsey law in relation to Guernsey registered companies (such as Esken) where the plan results in compromising the rights of members (as is the case for the proposed plan in relation to the company).
“Esken has, therefore, concluded that there is unacceptable risk associated with the court process to achieve the proposed outcome, which could also take considerable time to execute.
“Therefore, after detailed consideration of the company’s current financial situation, and absent any further viable proposals to deliver a stable solution to the challenges faced by the company, the board has now regrettably concluded that the company should be placed into administration in order to protect the interests of stakeholders.”
Esken directors will file documents in court today (March 21) to appoint administrators from AlixPartners UK to the company. That application is expected to be approved by the court over the course of the day.
Esken’s statement added: “Placing the company into administration does not breach the Recapitalisation Support Agreement, as announced on 6 March, and, therefore, is not expected to have any impact on the recapitalisation proposal being implemented in relation to London Southend Airport, which will continue to remain fully operational and funded under that proposal.”
London Southend Airport is Esken’s last significant asset having disposed of much of the group’s operations.
Just over a year ago Esken put up the ‘for sale’ sign following a strategic review, saying it was in the best interests of all stakeholders to secure the long term potential of its businesses and deliver value for shareholders through a managed disposal process and wind-down.
