Swissport has received a binding commitment from an ad hoc group of senior secured creditors for the provision of an interim super senior facility of €300 million, which the firm says 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 August 18. In addition, an agreement has been reached for a comprehensive restructuring and refinancing of Swissport, involving senior secured creditors, led by the above group of lenders under Swissport’s PIK facility agreement and HNA Group, Swissport’s current shareholder. The comprehensive restructuring will significantly deleverage the balance sheet and provide €500 million in new long-term debt financing, which will eventually replace the €300 million interim facility.
“This agreement marks a transformational milestone for Swissport. The €300 million of additional interim financing and the planned restructuring supported by our senior secured creditors and other stakeholders gives us the certainty that Swissport will trade successfully through the current market disruptions and emerge as an even stronger industry leader,” says Eric Born, the firm’s chief executive.
“It signals to our customers, our employees and all our other stakeholders that Swissport continues to be the partner they can rely upon. The agreement also represents an endorsement from some of the world’s leading investors in the fundamental strength of our business.”
“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.
The lenders that own in excess of 75% of Swissport Financing’s €410 million aggregate principal amount of 5.25% Senior Secured Notes due 2024 (the “SSN”) and Swissport’s credit agreement dated 14 August 2019 (the “CA”), such lenders are mainly from the US and the UK. The PIK Lenders represent 99% of the lenders under Swissport’s PIK facility agreement dated 14 August 2019.
The restructuring is expected to be completed in late 2020. The agreement in principle and the successful completion of the transactions will be subject to the execution of definitive documentation, customary conditions and regulatory and other approvals.