Esken Ltd (LSE:ESKN, OTC:ESKNF), the infrastructure company which owns London Southend Airport (LSA), saw shares plummet 44% to 0.5p on Tuesday after it warned investors it could be forced to pay more than £193 million by mid-February.
Esken’s current market capitalisation is slightly under £5 million.
In September, the company announced the Essex-based airport was being sued by Carlyle Global Infrastructure Fund (CGI) over an alleged technical breach with respect to a convertible loan agreement.
Now, the investment fund is alleging further breaches by LSA and has issued an acceleration notice to the airport.
Under this notice, LSA would need to repay £193.75 million by 16 February 2024.
Esken, which has been in the process of selling the airport, said it is “confident that LSA has a robust position in relation to the CGI claim”.
“There have been no payment defaults by LSA in relation to the convertible loan agreement and LSA cashflow has been in line with expectations,” a statement issued by Esken added.
The London-listed company said both it and LSA are working with advisors “investigating the validity of the alleged breaches”.
It claims that CGI decided to take action on “purported technical defaults” and said it hopes to resolve the issues directly with CGI.
Esken warned that the acceleration notice could destroy value for its shareholders, including CGI, as well as bondholders.
CGI initially agreed for the loan to mature in August 2028, having been drawn down in August 2021.