ZURICH (Reuters) - Swissport Belgium SA/NV, a loss-making unit of Swissport International AG which provides ground services at Brussels airport, will file for bankruptcy after attempts to turn around the business failed, Swissport said on Monday.
Its Belgian cleaning business will also file for bankruptcy, but the group’s separate cargo business in Brussels and Liege is unaffected, Swissport added in a statement.
Swissport, owned by China’s HNA Group, is the world’s largest provider of airport ground services and air cargo handling with operations at 300 airports in 47 countries.
“Beyond the chronic challenges in Brussels, the current market crisis is forcing Swissport International AG...to adopt a stricter practice regarding the funding of any loss-making subsidiaries, as to safeguard the group’s financial health,” it said.
The company’s global revenue collapsed by 80% due to the coronavirus pandemic and it is only gradually starting to recover, it said. It was “expecting a drawn-out market recovery, with reduced demand for air travel well into 2021. There is little room for subsidising local entities, which project losses even after global demand recovers”.
Swissport said the group was looking to raise additional liquidity to compensate for the revenue impact of travel bans imposed by governments around the world.
“Discussions with lenders and investors to secure the required liquidity and to ensure the company’s post-crisis stability are on a good path and Swissport remains confident to raise the necessary liquidity within the available time frame,” it said.
Reuters reported last month that a trio of distressed securities investors led by Apollo Global Management have bought debt of Swissport and are holding talks with the company as it seeks cash to ride out the COVID-19 crisis.
Reporting by Michael Shields; editing by Emelia Sithole-Matarise