Swissport fails to pay coupons for 2021, 2022 notes within grace period

By Marisa Wong

Los Angeles, July 16 – Swissport Investments SA announced that it has not made the interest payments due under its 6¾% senior secured notes due 2021 (ISIN: XS1331759388, XS1331156684) and 9¾% senior notes due 2022 (ISIN: XS1331759461, XS1331156841) as of July 15.

The interest payments were due on June 15. Because the coupon payments have not been made by July 15, this constitutes an event of default under the notes’ indentures.

On Wednesday, Swissport had issued a notice to holders of both series of stub notes regarding interest payments, the company’s financial position and potential next steps.

The company had disclosed in December 2020 a transaction that separated Swissport Group from Swissport Investments and resulted in the assets of Swissport Group no longer being under the indirect ownership of Swissport Investments. Since the closing of that transaction, the issuer’s remaining direct and indirect subsidiaries have been in the process of finalizing their financial statements and have since been dissolved (with the exception of Swissport Holding International Sarl, which remains in administration in England).

On Wednesday Swissport Investments said, to that end, it would like to discuss with holders of the stub notes the possibility of agreeing to a voluntary impairment of the notes obligations in exchange for a cash payment that would be shared pro rata with all holders of the stub notes.

The company noted that while this cash payment would be small in comparison to the obligations due under the notes, it is a cash payment that would otherwise not be available to noteholders if it has to file for bankruptcy under the laws of Luxembourg.

In addition, the voluntary impairment would make it possible for the company to be dissolved under Luxembourg law, which would beneficially eliminate costs and delays associated with any bankruptcy process.

Such a transaction would require the agreement of all of the holders of the stub notes.

The issuer had said it wanted to enter talks with the holders to see if a transaction could be reached before July 15.

As of Friday, no agreement has been reached between the issuer and the holders.

The company is still asking holders to consider raising questions or contacting the issuer and its advisers at swissportDL@neotrust.lu to negotiate a potential voluntary impairment proposal.

Swissport is a Zurich-based cargo handling company owned by Chinese company HNA Group. Swissport Investments is based in Luxembourg.

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