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Law360 (June 12, 2020, 7:18 PM EDT) -- Airport services business Swissport International on Friday asked a Delaware bankruptcy court for Chapter 15 recognition of a U.K. court proceeding to amend its loan agreements in order to raise the capital it needs to ride out the COVID-19 pandemic.
In its filings, the Switzerland-based company asked the U.S. court to recognize the U.K. proceedings it has begun to enact a "scheme of arrangement" that will allow it to take out new super-senior debt and get the liquidity is needs to survive the downturn in air travel brought on by the pandemic. Swissport said in its filings that passenger business was down 90% and cargo business down 30% from last year.
In the Chapter 15 declaration, Donald Mallon, Swissport's designated representative for the U.S. proceeding, said the company had enacted cost-cutting measures including employee furloughs and layoffs, and said in a press release last month that the company had about $437.8 million in cash — more than expected.
However, Mallon said the company still anticipated a need for between $285 and $399 million in new money to cover future liquidity shortfalls in the short term. He said the company had secured a term sheet from an ad hoc lender group, but that it was determined that in order to be attractive to lenders, any new loans would have to have priority senior to its existing $2.3 billion in funded debt. This would require the amendment of the current credit and intercreditor agreements, he said.
"While the debtor sought to obtain the unanimous consent of its lenders to the proposed amendments to its debt documents, such unanimous consent was not achieved within the requisite time frame," Mallon said.
As a result, Swissport on June 5 began proceedings in U.K. courts to enact a plan that will allow it to amend the loan documents with the 78% lender support it had been able to secure, Mallon said. A hearing is expected on June 24, he said.
Mallon said that as the loan documents are governed by New York state law, Swissport is asking the court to recognize the U.K. proceeding and enforce the scheme, but that no further court action in the U.S. was needed.
"In order to limit costs and relieve the burden on this court, the foreign representative respectfully requests that the court close this Chapter 15 immediately following entry of the proposed order," he said.
As of December, Swissport provided passenger and cargo handling services at 300 airports in 47 countries, according to its court filings.
The company said it was being advised in the U.K. 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 Fuelling Ltd., case number 20-11524 in the United States Bankruptcy Court for the District of Delaware.
--Editing by Alanna Weissman.
For a reprint of this article, please contact reprints@law360.com.
