THE SITUATION: COVID-19 HALTS AIR TRAFFIC, CREATING A LIQUIDITY CRISIS AT AN AIRPORT SERVICES PROVIDER
Swissport Holding International provides ground and cargo-handling services at 274 airports in 44 countries across six continents, posting 2019 revenues of €3.1 billion. In spring 2020, after governments and public health authorities imposed worldwide travel restrictions aimed at checking the spread of COVID-19, the global aviation industry effectively ground to a halt. Swissport’s business volumes plunged, with revenues down 70% against budget in the second quarter of 2020.
Although the company needed an immediate liquidity injection, its highly leveraged capital structure left little room for any additional borrowing. To obtain the requisite funding, Swissport sought a restructuring of its £2.1billion debt load.
THE APPROACH: DETAILED ASSESSMENT OF LIQUIDITY NEEDS AND AVAILABLE OPTIONS
Swissport engaged AlixPartners and other advisers in March 2020 in connection with three areas:
- Assess and challenge Swissport’s liquidity forecast for reasonableness and feasibility across a range of recovery scenarios
- Support the restructuring of Swissport’s existing liabilities to enable a new cash raise
- Develop contingency plans in case the preferred restructuring route was blocked
The team provided support when it really mattered, advising Swissport as it developed its business plan, proposing strategic initiatives, executing financial projections, quantifying liquidity needs and assessing the management team.
THE SOLUTION: DEBT RELIEF AND FRESH CASH SAVE A COMPANY—AND 45,000 JOBS
Relying on a detailed financial and operational assessment, Swissport completed its financial restructuring through a debt-for-equity swap in December 2020, transferring ownership of the company to a group of global financial investors. The restructuring was facilitated through Schemes of Arrangements in two jurisdictions and a pre-packaged administration appointment in the UK.
The restructuring successfully deleveraged Swissport’s balance sheet, clearing the way for €500 million in new long-term debt financing, saving 43,000 jobs, and securing a long-term future for a key player in the aviation ecosystem.
