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Deals

HNA's Swissport gets new owners with debt-for-equity deal

FILE PHOTO: Swissport airport workers walk across the tarmac at Liverpool John Lennon Airport in Liverpool, northern England, May 19 , 2016. REUTERS/Phil Noble/File Photo

ZURICH (Reuters) - Swissport is getting new owners in a debt-for-equity swap that includes a 500 million euros ($595.20 million) long-term debt facility and a 300 million euros interim facility to help keep it afloat, the airport services company said on Monday.

Senior secured creditors including SVP Global, Apollo Global Management, TowerBrook Capital Partners, Ares Management, Barclays Bank PLC, Cross Ocean Partners and King Street Capital Management will take ownership.

HNA Group, Swissport’s debt-strapped Chinese owner until now, “will share in the value creation” contingent on a future exit valuation, Swissport said.

With restructured finances, Swissport managers are now hoping to poach business from rivals made even more vulnerable due to COVID-19’s dramatic hit to airport traffic, the company said.

“With much lower debt and 500 million euros additional cash injected, we will be well positioned going forward to invest into the business and accelerate growth,” Chief Financial Officer Peter Waller said. “We expect to see increased outsourcing of ground handling services by airlines and being able to take volumes from some financially weaker competitors.”

Even before the new coronavirus lamed airline travel, HNA Group was desperately seeking to sell at a big loss to its $2.8 billion investment in 2016 as it sought to cut debt. It came under pressure after embarking on an aggressive M&A spree in the United States and Europe with deals worth an overall $50 billion.

Reporting by John Miller

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