Swissport secures €300 million in 'immediate liquidity'
One of the world's leading air cargo handling specialists, Swissport International, has secured a €300 million injection of funding and reached an agreement 'in principle' with senior creditors on comprehensive restructuring measures, to a backdrop of COVID-19 which has severely impacted air transport.
Earlier this summer, there were reports that the company was set to slash half its global UK workforce with a loss of up to 4,556 of its 8,500 jobs although the cuts in cargo handling were expected to be far less severe than among passenger services personnel.
“Swissport has received a binding commitment from an ad hoc group of senior secured creditors (the 'AHG)', subject to final documentation, for the provision of an interim super senior facility of €300 million, which delivers immediate liquidity for Swissport to trade through the COVID-19 market crisis and the restructuring process. The €300 million adds to the more than €200 million liquidity Swissport still had as of 18 August (2020),” it said in a statement.
“In addition, an agreement ‘in principle’ has been reached for a comprehensive restructuring and refinancing of Swissport, involving senior secured creditors, led by the AHG, lenders under Swissport’s PIK facility agreement (the 'PIK Lenders') and HNA Group Co., Ltd. (HNA), Swissport’s current shareholder.
“The restructuring will position Swissport as a strong global partner for airlines and airports alike - both in the passenger services business and in air cargo handling. With improved liquidity and low debt levels going forward, Swissport will be able to take advantage of growth opportunities post COVID-19.”
Swissport's CFO, Peter Waller, added: “On completion of the transaction, Swissport will have significantly less leverage. The company will have a much stronger financial position and the resources to invest into the business, execute on our operational plans and exploit growth opportunities. Swissport will be very well positioned to succeed in the long-term,” adds Peter Waller, CFO of Swissport International AG.
Meanwhile, Swissport's revenue for the three months to 30 June 2020 were down 70% on the prior year to €235.5 million. Ground handling and cargo volumes volumes were down by 88% and Cargo 24% respectively for the period.
The company incurred an operating loss (EBITDA- earnings before interest, tax, depreciation and amortisation) of €67 million, compared to an operating profit of €76 million a year earlier,“as a result of the significant volume drop from Covid-19. In July however, Swissport managed to record again positive EBITDA from better revenue, even higher cost reductions and the impact of CARES.”
Swissport has seen an “uptick” in volumes since the end of June with the decline relative to prior year levels in the first half of August reduced to -67% and -19% for ground handling and cargo respectively.