Esken to enter administration as restructuring no longer "viable"

(Alliance News) - Esken Ltd shares were suspended on Thursday as the company announced its intention to appoint administrators.

Esken shares last traded at 0.08 pence early on Thursday morning. The stock has plummeted by 98% over the past 12 months.

The London-based provider of infrastructure, aviation and energy services originally announced a restructuring plan on March 6, covering GBP53.1 million in debt, with its main bondholder Cyrus Capital Partners. It also agreed to a recapitalisation proposal between subsidiary London Southend Airport Co Ltd, Cyrus, and Carlyle Global Infrastructure Fund.

Because of these agreements, Esken would have been delisted from the London Stock Exchange as part of an orderly wind-down.

On Thursday, however, Esken said that after consulting advisers it has concluded that implementing the restructuring plan "has ceased to be commercially viable".

Esken, which is registered in Guernsey, said that "additional issues arise under Guernsey law...where the plan results in compromising the rights of members," as was the case for the Cyrus restructuring plan. Consequently, Esken concluded that the lengthy court process needed to complete the restructuring came with "unacceptable risk".

As a result, Esken "has now regrettably concluded" that it should be placed into administration.

The board arrived at this decision "after detailed consideration of the company's current financial situation, and absent any further viable proposals to deliver a stable solution" to Esken's challenges. By going into administration, Esken hopes "to protect the interests of stakeholders".

Esken therefore said it would apply in court on Thursday to appoint administrators from AlixPartners UK LLP, and expects this to be approved later in the day.

Esken noted however that entering administration should not have any impact on the recapitalisation proposal in relation to London Southend Airport.

Under the recapitalisation agreement, Carlyle's stake in London Southend Airport Co Ltd will increase to 82.5% while Esken's stake will fall to 17.5%. The airport "will continue to remain fully operational and funded under that proposal".

By Emma Curzon, Alliance News reporter

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