Airline catering company Gategroup Holding AG has announced that its shareholders, RRJ Capital and Temasek, and all bank lenders providing syndicated loans to the group have reached an agreement in principle, under a binding term sheet, to support a comprehensive restructuring of the group's financial indebtedness.
Gategroup said that the proposed transaction will provide it with significant new liquidity to address short and medium-term needs, and will help establish a stable capital structure.
The group stated that the transaction is supported by its shareholders and bank lenders under a combined facilities agreement.
The key features of the proposed transaction are 500 million Swiff francs (CHF) of new funding provided by shareholders in the form of CHF 25 million in equity and a CHF 475 million subordinated, convertible loan upon completion of the transaction; CHF 200 million provided as a senior secured interim liquidity facility extended by shareholders repayable upon completion of the transaction or, at latest, six months after issuance; and the extension of the maturity of the group's syndicated loan facilities to October of 2026 and certain other amendments.
The transaction will be conditional on the extension of the maturity of the group's CHF‑denominated bond to February of 2027, while maintaining the cash coupon.
The transaction is subject to the execution of definitive documentation, customary conditions, and regulatory and other approvals. The parties are finalising a lock-up agreement, and gategroup said that detailed terms of the transaction together with information on the process for maturity extension of the bonds will be released in due course.
"A Key Milestone"
Gategroup CEO Xavier Rossinyol stated, "This transaction is a key milestone for the group. It will position Gategroup well for a recovery in the aviation sector and also support the group's diversification. The agreement signifies the commitment of our shareholders and lenders to the group, its management and employees
"The group will work together with its stakeholders to further improve our cost structure and prepare for the ramping-up of business by our customers."
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