Zurich-based handling giant Swissport announced plans to refinance some of the company’s outstanding debt with new senior credit facilities and new notes. The anticipated proceeds are expected to be used to repay and redeem existing debt and some of Swissport's currently outstanding notes, respectively.
Is this a decisive turning point in the history of the ground handling agent?
So it seems. Otherwise CEO Eric Born would hardly have taken a U-turn, revoking his decision to leave, opting for prolonging his tenure as President and CEO of Swissport International for another year. The executive’s decision to extend his contract followed the company’s announcement of their successful completion of the debt refinancing.
Strong signal of continuity
In a release, Swissport points out that Mr Born’s contract extension and the refinancing will “ensure strategic continuity and financial stability, enabling Swissport to further consolidate its leading market position.” After a successful 2018 business year, this is a signal of continuity for Swissport’s customers, its employees, partners and investors, reads the statement.
Swissport's outstanding debt will be refinanced with new senior credit facilities and new notes. The anticipated proceeds are expected to be used to repay and redeem existing debt and some of Swissport's currently outstanding notes, respectively, states the company.
Restructuring of debts
The refinancing is comprised of a new €75 million revolving credit facility, a new €50 million delayed draw loan facility, an aggregate principal amount of €1,2 billion across a new term loan B facility and an offering of new euro-denominated senior secured notes, along with an offering of 280 million of new euro-denominated senior notes. The consummation and actual terms of the refinancing, including the notes offering, are subject to a number of factors, including market conditions, negotiation and execution of definitive documents and satisfaction of customary closing conditions.
Encouraging business results
Concurrently, the ground handler published its half-year results 2019 with revenues totaling €1,525 million, up €88 million y-o-y. The service provider’s operating EBITDA increased to €121.9 million, compared to €113.7 million for the same period in 2018.
Swissport holds that the financial results were driven by organic growth, the acquisition of Australian handler Aerocare in spring of 2018, strong de-icing of aircraft during the first quarter 2019 and continued growth particularly in the Middle East. In addition to this, exits from loss-making businesses contributed to the satisfying EBITDA as well, holds the Swiss ground handler.
Following the announcement of the encouraging financial figures, formerly indicated plans by owner Hainan Airlines to sell Swissport to a financial investor or competitor seem to be off the table for now.