(Alliance News) - Esken Ltd on Monday said that its subsidiary London Southend Airport Co Ltd negotiated a recapitalisation proposal with Carlyle Global Infrastructure Fund which will be funded by CGI and Cyrus Capital Partners.

Shares in the Liverpool-based infrastructure, aviation and energy services provider fell 49% to 0.20 pence each on Monday afternoon in London. Its shares are down 97% from a year ago.

Esken emphasised that the proposal could "could have a material adverse impact" that would result in its subsidiary's stake in LSA being reduced to a minority interest.

Esken said the proposal includes a commitment by LSA to make an application to court for a restructuring plan, highlighting that "the terms of the proposed recapitalisation proposal, whether implemented via a restructuring plan or consensually, would amongst other things result in Esken Aviation Ltd's shareholding in LSA being significantly reduced to a minority interest."

Esken said there can be no certainty that any discussions will lead to a consensual agreement, adding that it is "also undertaking contingency planning, including exploring access to alternative funding to cover its liquidity needs. The recapitalisation proposal, if agreed to by the company or imposed on it by the courts, could have a material adverse impact on the group."

In January, Carlyle alleged a technical breach by LSA with respect to the convertible loan agreement entered into between LSA and CGI. Esken back then said it was confident that LSA has a robust position in relation to the CGI claim.

By Tom Budszus, Alliance News slot editor

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