Lenders to the world's biggest airport baggage-handling group Swissport have offered a rescue package that would restructure its €2.1 billion of net debt and could transfer ownership to them from struggling Chinese conglomerate HNA Group.
The owners of €1.4 billion of senior secured bonds issued by Swissport have promised to invest in the business to help it survive the pandemic, which has hit its operations hard with the grounding of flights.
Swissport is the world’s largest provider of airport ground services and air cargo handling, with operations at 300 airports in 47 countries. It employs more than 800 staff in Ireland
The group needs funding of between €450 million and €570 million over the next 14 to 18 months, according to Reorg Research.
The investor group also includes the majority of those who own “payment in kind” (PIK) notes – a type of debt where the borrower can pay interest in additional notes rather than cash – according to a person close to the proposal. The bondholders are said to include Apollo Global Management and SVP Global.
The proposed debt-for-equity swap is likely to involve the senior bondholders and PIK note-holders taking control of the group, according to the person. This could wipe out the equity ownership of HNA and the more junior debt, depending on the final structure of a deal. HNA declined to comment.
A spokesman for Swissport said it had been in discussions with lenders and investors since the start of the crisis.
“We have been exploring several possible options to raise additional liquidity and to put Swissport on a stable financial foundation. These discussions are still ongoing, and there has been significant and tangible progress, but nothing is finite yet.”
Swissport has attempted to restructure its loans to raise more money but has faced opposition from some lenders. – Copyright The Financial Times Limited 2020