Swissport secures support under U.S. "CARES Act"
Swissport North America Inc. and the U.S. Department of the Treasury have signed an agreement under the U.S. Coronavirus Aid, Relief, and Economic Security (CARES) Act. The agreement provides Swissport with approximately 170 million US dollars of additional funds for payroll support during the disruption that the COVID-19 pandemic has caused in the aviation industry. Swissport also recently completed a UK Scheme of Arrangement and Consent Solicitation which creates the ability to raise significant additional liquidity.
Swissport North America Inc. has agreed on 10 July 2020 a Payroll Support Program agreement (“PSP Agreement”) with the U.S. Department of the Treasury under the CARES Act. Under the terms of the PSP Agreement Swissport expects to receive a total of 170.4 million US dollars of financial assistance, of which 111.9 million US dollars will take the form of a grant and 58.5 million US dollars will take the form of an unsecured, non-amortizing 10-year promissory note (the “Promissory Note”).
Swissport expects that the proceeds from the PSP Agreement will be disbursed by the Treasury in three instalments. The first instalment, in the aggregate amount of 85.2 million US dollars, has been received on 10 July 2020 by Swissport. Further instalments are expected to be received by Swissport by the end of July and the end of August 2020. The interest rate payable on the Promissory Note will be fixed at 1 percent in cash and 3 percent in PIK for the first five years with increasing rates each year thereafter. The Promissory Note will not have any financial covenants, and Swissport will have the right to prepay amounts outstanding under the Promissory Note, in whole or in part, at any time, without penalty or premium.
The PSP Agreement provides, among other things, that the PSP funds must be used exclusively for the continuation of payment of wages, salaries, and benefits to qualified employees of Swissport in the United States. The PSP Agreement between Swissport and the Treasury is consistent with the standard form of PSP agreement for air carrier contractors that has been made available to the public by the Treasury.
Swissport International AG provided lenders and investors with a trading update and the reduced anticipated funding requirements of the business to trade through the COVID-19 pandemic. Before any funds received under the U.S. Cares Act, Swissport’s liquidity had amounted to approximately 340 million euros at the end of June.
As previously communicated, Swissport is seeking significant additional financing to mitigate the economic impact of the COVID-19 pandemic and is exploring all avenues to strengthen its liquidity. On 6 July, Swissport successfully completed a UK Scheme of Arrangement and Consent Solicitation which creates the ability to effect certain changes to the existing financing arrangements with the consent of a majority of the senior lenders, including the raising of up to 380 million euros of super senior debt. This marks an important milestone in Swissport’s efforts to secure additional funding, which it requires to navigate the COVID-19 pandemic.
Swissport is making progress in its discussion with its lenders and other stakeholders and is confident that the required additional financing can be secured in time.
FORWARD LOOKING STATEMENTS
This announcement includes forward-looking statements. All statements, other than statements of historical fact, included in this announcement regarding the financial condition of Swissport or regarding future events or prospects are forward-looking statements. The words “aim,” “anticipate,” “believe,” “continue,” “estimate,” “expect,” “future,” “help,” “intend,” “may,” “can,” “plan,” “shall,” “should,” “will” or the negative or other variations of them as well as other statements regarding matters that are not historical fact, are or may constitute forward-looking statements. Swissport has based these forward-looking statements on management’s current view with respect to future events and financial performance. These views reflect the best judgement of management but involve a number of risks, uncertainties and assumptions. Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results may differ materially from those predicted in the forward-looking statements and from past results, performance or achievements. All forward-looking statements contained in this announcement are qualified in their entirety by this cautionary statement. There is no intention to update or revise any forward-looking statements whether as a result of new information, future events or otherwise. All subsequent written or oral forward-looking statements attributable to Swissport or persons acting on their behalf, are expressly qualified in their entirety by the cautionary statements contained throughout this announcement. As a result of these risks, uncertainties and assumptions, you should not place undue reliance on these forward-looking statements.
This announcement contains inside information as defined in the Market Abuse Regulation (EU) 596/2014 (“Market Abuse Regulation”) and is disclosed in accordance with Swissport’s obligations under the Market Abuse Regulation.
This announcement is for information purposes only and the summary above does not purport to be exhaustive as a summary of the PSP Agreement.
2019, Swissport International AG provided best-in-class airport ground services for some 265 million airline passengers and handled roughly 4.6 million tons of air freight in 115 cargo warehouses worldwide. Several of its warehouses have been certified for pharmaceutical logistics by IATA’s CEIV Pharma and by the British MHRA. The world's leader in airport ground services and air cargo handling, with 64,000 employees, achieved consolidated operating revenue of 3.13 billion euros in 2019. At the end of December 2019, Swissport was active at 300 airports in 47 countries on six continents.