(Alliance News) - Esken Ltd on Tuesday proposed the disposal of its wholly-owned subsidiary Esken Renewables Ltd to Pioneer Balmoral UK Ltd for net proceeds of around GBP78.5 million.

Liverpool-based infrastructure, aviation and energy services provider Esken said Pioneer Balmoral UK is a vehicle fully owned and funded by the sustainable infrastructure fund Pioneer Infrastructure Partners SCSp, managed by Pioneer Point Partners LLP.

Esken said the consideration for all of Esken Renewables' shares would be around GBP77.6 million, plus an expected GBP6.9 million as an intercompany loan reimbursement, representing an equity value of GBP84.5 million to be satisfied in cash.

This would reflect an enterprise value of GBP107.7 million, Esken said, with adjustments made for cash and debt-like items.

Esken said the GBP78.5 million net proceed would be used to immediately replay the GBP55 million of committed funding under its facilities agreement and associated costs.

The disposal will provide Esken with increased financial stability to support the previously announced managed sale of London Southend Airport, Esken said.

While early in the process, Esken said the board has been encouraged by the initial level of interest "from a range of parties who recognise the long-term strategic value" of London Southend Airport.

Esken said any completion of a disposal would be conditional on shareholder approval at a general meeting and other conditions.

It expects the disposal to complete in early December.

"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," said Esken Executive Chair David Shearer.

"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 [mergers and acquisitions] 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 [London Southend Airport], to facilitate a managed process to realise value for shareholders."

Shares in Esken were up 5.0% to 3.15 pence each in London on Wednesday morning.

By Greg Rosenvinge, Alliance News reporter

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