Esken is to wind itself up after agreeing to dispose of Southend Airport, its main asset, to private equity group Carlyle, sending its share price crashing by two-thirds.
In a statement, Esken said it had agreed to the recapitalisation proposal from Carlyle, its main lender, as fighting it would have been potentially destructive to all shareholders.
Ratifying the recapitalisation through the courts will take several months, Esken said, but once complete it will delist its shares with any return to shareholders likely to be ‘negligible’.
Terms of the recapitalisation proposal are for the conversion of a convertible loan of £193.75 million due to Carlyle into an 82.5% stake in LSA.
A £24.3 million debt due by LSA to Esken Aviation Limited, will be converted into a 17.5% stake.
An initial £5 million of short-term unsecured bridge funding will be provided to the airport as part of a commitment of £32 million of new money to secure the airport's future.
Shares in Esken fell 67% to 0.05p.