HNA Group, which is saddled with one of the highest levels of debt in corporate China, is in advanced talks to sell its Swiss cargo handler, Swissport, to Toronto-based Brookfield Asset Management Inc., Bloomberg reported. The Canadian asset manager has emerged as the preferred bidder for Swissport International, the report quoted people as saying.
The sale, which could fetch more than US$3 billion, would be the biggest disposal for the debt-laden Chinese conglomerate, since it sold its stake in Hilton Worldwide Holdings in April.
Representatives for HNA, Brookfield and Swissport declined to comment on the Bloomberg report.
Deal still not signed, sealed and delivered
While the Swissport talks are at an advanced stage, no final decisions have been made and they could still fall apart, sources said, because other bidders remain interested in the asset.
As reported earlier by CargoForwarder Global, Cerberus Capital Management was among suitors earlier pursuing an acquisition of Swissport. Singapore state investment company Temasek Holdings has
also been studying a potential investment in Swissport as it considers deals with HNA that are complementary to its portfolio.
HNA agreed to buy Swissport from buyout firm PAI Partners for 2.73 billion Swiss francs (US$2.8 billion) in 2015, at a time when the Chinese group was on a buying spree. Swissport had been slated
for an initial public offering, though the conglomerate decided to postpone the share sale in April amid a volatile market for listings.
Swissport insists on continued interest payments
In a related move, Swissport earlier this month said it had extended an agreement to delay the collection of the outstanding balance of its loan to HNA Group for an unspecified period.
The ground handling company added that it would continue to earn a market interest rate on the residual amount of the affiliate loan.
In May, the HNA Group repaid US$100m (€83m) of the €360m affiliate loan it had received from Swissport with an agreement not to collect the outstanding amount for another five months.
Nol van Fenema