China’s HNA is to list a 65 per stake in Gategroup, the Swiss airline catering company it acquired less than two years ago, in the latest move by the acquisitive conglomerate to strengthen its finances.
Gategroup announced on Tuesday that an initial public offering was planned for around the end of this month, subject to approval by Six, the Swiss stock exchange. The listing is designed to raise SFr350m ($373m) to fund expansion.
The IPO comes as HNA battles to raise cash for an estimated $20bn in debt maturing this year or next. The company has sold some assets, extended credit agreements with banks and so far kept domestic creditors at bay.
HNA ran into controversy in Switzerland last year when the country’s takeover watchdog ruled that the Chinese group had provided “untrue or incomplete” information regarding its ownership when it acquired Gategroup for SFr1.4bn in 2016.
Six had no comment on Gategroup’s proposed stock market return.
The listing is one of two IPOs the Chinese conglomerate plans in Switzerland this year: HNA is also looking to raise money from a public offering of shares from aviation services group Swissport. Analysts have said that Swissport’s deal could prove more challenging than Gategroup’s, because its finances are more intertwined with its Chinese parent due to a series of short-term loans the Swiss group has made to HNA affiliates.
To tempt investors, Gategroup said a nine-strong board of directors would include five independent members. The board would be chaired by Adam Tan, HNA’s chief executive, who has been shuttling back to China regularly to try to sort out the group’s troubled finances.
The offer would allow Gategroup “to accelerate ongoing investments in our future growth”, said Xavier Rossinyol, chief executive. In his three years in the job, Mr Rossinyol has driven Gategroup’s geographical expansion but reduced its brands and focused on its core onboard food and drinks businesses. “HNA has been a strong supporter and enabler of this transformation,” he said.
While HNA had helped Gategroup develop activities in Asia, its standing with clients could be helped by becoming a public-listed company again, argued people close to the group.
Gategroup reported a 35 per cent rise in revenues last year to SFr4.6bn. Pre-tax operating profits rose 50 per cent to SFr300m.