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Law360 (June 12, 2020, 7:18 p.m. EDT) — Airport services company Swissport International filed on Friday in a Delaware bankruptcy court for recognition under Chapter 15 of a UK legal proceeding seeking to modify its loan agreements to raise the capital it needs to weather the COVID-19 pandemic.
In its filings, the Swiss-based company asked the US court to recognize the UK proceedings. She has begun to adopt a “scheme of arrangement” that will allow her to take on new super senior debt and obtain the cash needed to survive. slowdown in air transport caused by the pandemic. Swissport said in its filings that passenger activity was down 90% and freight activity by 30% compared to last year.
In the Chapter 15 statement, Donald Mallon, Swissport’s designated representative for the U.S. proceeding, said the company has taken cost-cutting measures, including furloughs and layoffs, and said in a press release the last month that the company had approximately $437.8 million in cash. more than planned.
However, Mallon said the company still anticipates needing between $285 million and $399 million in new money to cover future near-term cash shortages. He said the company had obtained a term sheet from an ad hoc group of lenders, but it had been determined that to be attractive to lenders, any new loan would have to take priority over its existing funded debt of 2 .3 billion. This would require modifying current credit agreements and intercreditor agreements, he said.
“While the Debtor sought to obtain unanimous consent from its lenders to proposed changes to its debt documents, such unanimous consent was not obtained within the required timeframe,” Mallon said.
As a result, Swissport began proceedings in UK courts on June 5 to adopt a plan that will allow it to amend loan documents with the support of 78% of the lenders it had been able to obtain, Mallon said. A hearing is scheduled for June 24, he said.
Mallon said that because the loan documents are governed by New York state law, Swissport is asking the court to recognize the UK process and enforce the scheme, but no further US legal action. United was needed.
“In order to contain costs and ease the burden on this court, the Foreign Representative respectfully requests the court to close this Chapter 15 immediately upon entry of the proposed order,” he said.
As of December, Swissport was providing passenger and cargo handling services at 300 airports in 47 countries, according to its court documents.
The company said it was being advised in the UK proceedings by Houlihan Lokey.
Swissport is represented by Jeffrey M. Schlerf, Carl D. Neff, Johnna M. Darby and Daniel B. Thompson of Fox Rothschild LLP and Thomas Lauria, Richard S. Kebrdle, William A. Guerrieri, Chris Shore, Richard Graham, Samuel P. Hershey and Kathryn L. Sutherland-Smith of White & Case LLP.
The case is In re: Swissport Fueling Ltd., case number 20-11524 in the United States Bankruptcy Court for the District of Delaware.
–Edited by Alanna Weissman.
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