WHEN ATTENTION TO DETAIL ENABLES A RESTRUCTURING TO TAKE OFF

Overview

  • Swissport, a leading global provider of ground and cargo-handling services that served 265 million passengers and handled 4.6 million tons of cargo in 2019, needed significant short-term liquidity when revenue slid 80% amid the COVID-19 pandemic
  • The business, already highly leveraged and struggling for profitability before the pandemic struck, sought new cash and debt relief, which would enable it to continue trading
  • After its Belgian subsidiary filed for bankruptcy protection and other business units imposed large layoffs, Swissport engaged AlixPartners to fashion a restructuring and ownership transfer that deleveraged the balance sheet and saved 43,000 jobs

The Swissport case demonstrates how AlixPartners’ detailed understanding of a business can lay the foundation for its recovery

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:

  1. Assess and challenge Swissport’s liquidity forecast for reasonableness and feasibility across a range of recovery scenarios
  2. Support the restructuring of Swissport’s existing liabilities to enable a new cash raise
  3. 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.
 

when it really matters alixpartners 2019

WHEN IT REALLY MATTERS: EBITDA IMPROVEMENT IN SEVEN MONTHS—AND A HIGHLY PROFITABLE EXIT IN FIVE YEARS

The performance improvement achieved at our client’s newly acquired portfolio company—an $11 million increase in annual EBITDA in just seven months—speaks volumes about the importance of implementation planning early in the investment game.

  • The outcomes of this case show how AlixPartners’ approach is distinctive in other respects as well. Specifically:
  • We support our PE clients throughout all stages of the investment lifecycle, including pre-transaction, pre-close planning, value creation, and achievement of full potential. 
  • We help clients with crisis management in all stages of the lifecycle—such as determining how to turn around a target that’s in bankruptcy or getting a struggling transformation program back on track at a newly acquired business.
  • We identify, drive, and help secure sustainable improvements in portfolio companies’ performance.
  • We work side-by-side with PE sponsors and their portfolio companies’ management teams to ensure that deals deliver the intended value. 

Our unique approach enabled this client to quickly restore their distressed portfolio company’s EBITDA performance to levels that attracted a buyer willing to pay a handsome price—one that nearly doubled the investment value at exit.

The performance improvement achieved at our client’s newly acquired portfolio company—an $11 million increase in annual EBITDA in just seven months—speaks volumes about the importance of implementation planning early in the investment game.

  • The outcomes of this case show how AlixPartners’ approach is distinctive in other respects as well. Specifically:
  • We support our PE clients throughout all stages of the investment lifecycle, including pre-transaction, pre-close planning, value creation, and achievement of full potential. 
  • We help clients with crisis management in all stages of the lifecycle—such as determining how to turn around a target that’s in bankruptcy or getting a struggling transformation program back on track at a newly acquired business.
  • We identify, drive, and help secure sustainable improvements in portfolio companies’ performance.
  • We work side-by-side with PE sponsors and their portfolio companies’ management teams to ensure that deals deliver the intended value. 

Our unique approach enabled this client to quickly restore their distressed portfolio company’s EBITDA performance to levels that attracted a buyer willing to pay a handsome price—one that nearly doubled the investment value at exit.

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