Swissport secures support under US 'Cares Act'
Swissport North America Inc. and the US Department of the Treasury have signed an agreement under the US Coronavirus Aid, Relief, and Economic Security (CARES) Act. The agreement provides Swissport with approximately 170 million US dollars of additional funds for payroll support during the disruption that the COVID-19 pandemic has caused in the aviation industry.
Swissport also recently completed a UK Scheme of Arrangement and Consent Solicitation which creates the ability to raise significant additional liquidity.
On July 10th, Swissport North America Inc. agreed a Payroll Support Program agreement (“PSP Agreement”) with the US Department of the Treasury under the CARES Act. Under the terms of the PSP Agreement Swissport expects to receive a total of 170.4 million US dollars of financial assistance, of which 111.9 million US dollars will take the form of a grant and 58.5 million US dollars will take the form of an unsecured, non-amortizing 10-year Promissory Note.
Swissport expects that the proceeds from the PSP Agreement will be disbursed by the Treasury in three instalments. The first instalment, in the aggregate amount of 85.2 million US dollars, has been received on 10 July 2020 by Swissport. Further instalments are expected to be received by Swissport by the end of July and the end of August 2020. The interest rate payable on the Promissory Note will be fixed at 1 percent in cash and 3 percent in PIK for the first five years with increasing rates each year thereafter. The Promissory Note will not have any financial covenants, and Swissport will have the right to prepay amounts outstanding under the Promissory Note, in whole or in part, at any time, without penalty or premium.
The PSP Agreement provides, among other things, that the PSP funds must be used exclusively for the continuation of payment of wages, salaries, and benefits to qualified employees of Swissport in the United States. The PSP Agreement between Swissport and the Treasury is consistent with the standard form of PSP agreement for air carrier contractors that has been made available to the public by the Treasury.
BlueSky Business Aviation News | 16th July 2020 | Issue #566