HNA-owned Swissport International has appointed Houlihan Lokey [HLI:US] as a financial adviser to review its debt amid halted air traffic caused by COVID-19 related transportation restrictions, as reported by Deal Street Asia on April 3. HNA also appointed law firm White & Case to its team of advisers and is seeking to restructure its EUR1.6bn (USD1.7bn) debt. Houlihan declined to comment on the issue.
The news comes as a growing number of major companies in at-risk industries such as energy, retail, and travel move to manage their debt obligations or request state aid to soften the impact of the COVID-19 outbreak. Swissport CEO Eric Born stated in a recent interview that the airport baggage handling firm has already lost 70% to 80% of its global revenue due to the impact of the pandemic and that it plans to furlough 60% of its workforce by end-April to lower costs. On April 3, Bloomberg data indicated that Swissport’s junior debt collapsed from 41 cents per euro to 5 cents and that its secured bonds declined 11 cents per euro to 48 cents. The airport luggage handler stated that as of February, it had over EUR300m in cash and estimated that it would become illiquid by early summer if it is unable to secure new funding and government support. In 2015, HNA originally purchased Swissport for CHF2.7bn (USD2.8bn) but repeatedly failed to dispose of the business.