S&P drops gategroup to SD

S&P said it lowered gategroup Holding AG to SD from CCC and removed it from CreditWatch with negative implications, where it was placed on Nov. 18.

The downgrade follows gategroup completing its restructuring, S&P said.

The company’s creditors agreed to extend the maturity of the CHF 350 million unsecured notes and €665 million in senior bank debt, including a €250 million term loan and a €415 million revolver, by five years to February 2027 and October 2026, respectively.

The senior debt lenders also agreed to exchange annual cash interest payments for an option for gategroup to capitalize its interest. The restructuring also replaced financial maintenance covenants, net leverage and interest cover ratios, with a CHF 25 million minimum liquidity test.

“We view the transaction as distressed since we believe lenders will receive less value than originally promised,” S&P said in a press release.

Shareholders Temasek and RRJ Capital, extended CHF25 million in equity and provided a long-term subordinated convertible loan of CHF 475 million. The loan will accrue interest at 12˝% that will be due when it matures in March 2027. These funds replace a super senior CHF 200 million liquidity facility, of which about CHF 60 million was drawn as of Dec. 31, that gategroup's owners had made available to the company in November as short-term liquidity support, the agency noted.

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