Candover in Swissair talks

Candover has confirmed it is in exclusive talks with Swissair to buy Swissport, the company’s airport ground handling business. Although no details about the price have been revealed the deal is reported to be worth in excess of GBP200 million. Swissair will not be discussing the sale with other interested parties in the next two months while it negotiates and tries to complete the deal with Candover.

If the acquisition is completed it will be the first from Candover’s EURO1.5 billion 2001 Fund, which ultimately hopes to raise EURO2.5 billion. The buyout will give Candover a significant stake in the Swissport business while Swissair will retain a minority stake.

The passenger handling operations at Zurich Airport will not be included in the sale and there are no plans to change the existing organisation and management of the company.

In a statement issued by Swissport the company said it was heading for a new and bright future under Candover’s ownership and that, out of the interested investors, Candover offered the best prospective for a successful and sustainable future. Mark Gumienny, managing director of Candover, said: “We intend to work with management to grow the business both organically and through acquisitions to become the number one ground handling company.”

Swissport serves 500 airlines at over 130 airports in 25 countries worldwide. It provides passenger services (check-in, baggage handling), aircraft, ramp and cargo handling services (cabin cleaning, aircraft loading) and planning and management services (weather briefing, fuel planning). Last year Swissport generated revenues of CHF1.1 billion (EURO697 million) and sales for the first half of 2001 were CHF557 million compared to CHF508 million for the same period last year.

In July Swissair announced an 18-month programme of disposals which aims to reduce the group’s net debt(CHF7.8 billion at the end of June) by CHF2 billion. The group has extricated itself from loss-making situations with AOM-Air Liberte and Sabena and so far raised CHF900 million from the disposal of non-core assets this year. Group chairman and chief executive of Swissair, Mario A. Corti, commented: “With these divestments, we generate considerable equity and accelerate the achievement of our objective to reduce the group’s net debt.”

Schroder Salomon Smith Barney has been appointed as advisor for the disposal of The Nuance Group. The sale, which Swissair hopes to have completed by early next year, will be via auction. The group operates duty-free and duty-paid shops at airports, on ferries and in cities, as well as in-flight sales.