ESKN Esken Limited

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