Swissport Announces Solutions to Technical Default & Launches TLB Refinancing and an Exchange Offer of Secured Notes and Senior Notes
The previously announced technical breach required a technical solution
Strong shareholder commitment with €718 million of new cash equity in April 2017
New restricted perimeter created to ensure no impact from the HNA share pledge
Zurich, Switzerland – 11 July 2017: Swissport Group (“Swissport” or “the Group”) is pleased to announce a capital structure solution to the disclosed defaults on 3rd May 2017 which arose as a consequence of a technical breach under its Credit Agreement.
The solution comprises a new capital structure strategy that includes €200 million of gross debt repayment, and the creation of a new distinct credit and covenant perimeter for the Group in respect of the Credit Facility and the New Notes (as referred to in the Exchange Offer below). This will improve the Group’s capital structure and preserve the integrity of the collateral package for the benefit of investors.
It is Swissport’s intention to migrate its existing capital structure to a new credit perimeter that encompasses the entire existing business operations of the Group, and is not affected by the HNA share pledge.
Swissport Financing S.à r.l. (the New Borrower) intends to raise a new €460 million Term Loan B that, together with €200 million of the Group’s existing cash on hand, will refinance the existing €660 million Term Loan B under the Credit Facility utilising a portion of the funds received by way of a €718 million equity injection from HNA Group in April 2017.
The strong shareholder commitment evidenced with new cash equity injection, together with the repayment of €200 million in gross debt will leave Swissport in a strong financial position, with sufficient liquidity to meet its obligations and the financial flexibility to pursue attractive growth opportunities.
Swissport is also pleased to announce the launch of an Exchange Offer (“the Offer”) by the Existing Borrower to Swissport Financing S.à r.l. (the new borrower). Key terms of the Offer relate to an Exchange for (a) any and all of its outstanding 6.750% Senior Secured Notes due 2021 with an original aggregate principal amount of MEUR 400, all of which remains outstanding (the "Existing Secured Notes"), and (b) any and all of its outstanding 9.750% Senior Notes due 2022 with an original aggregate principal amount of MEUR 290 of which MEUR 280.5 remains outstanding (the "Existing Unsecured Notes," and together with the Existing Secured Notes, the "Existing Notes").
Commenting on today’s announcement, Chief Financial Officer Dr. Christian Goeseke said: “We have sought to provide a technical solution to the technical breach that benefits all Swissport stakeholders and we believe this strategy provides for that. The solution not only deleverages the business and protects investors by ring-fencing investors from the HNA pledges and insulates the operating businesses from similar technical breaches occurring in future.”
Also commenting on today’s developments, Chief Executive Eric Born said: “We are delighted with these solutions and look forward to taking full advantage of the growth opportunities available to Swissport under our much improved capital structure”.
Dr. Christian Goeseke
T: + 41 43 815 01 30
Richard Oldworth / Chris Judd
T: +44 (0)20 7466 5000
Notes to editor
Swissport International Ltd. provides ground services for more than 230 million passengers and handles 4.3 million tonnes of cargo a year on behalf of some 835 client-companies in the aviation sector. With a workforce of more than 62,000 personnel, Swissport is active at more than 280 stations in 48 countries across five continents, and generates consolidated operating revenue of EUR 2.7 billion. www.swissport.com.