SWITZERLAND. gategroup Holding, the world’s largest provider of airline catering services by revenue, today revealed plans to list its shares on SIX Swiss Exchange.  gategroup also said that the current sole owner of gategroup, HNA Aviation (Hong Kong) Airline Catering Holding Co. Ltd), an arm of the debt-laden HNA Group, intends to sell the majority of its holdings in the company.

HNA has indicated its plan to remain a “long-term anchor shareholder”, gategroup noted.

The envisaged Initial Public Offering (IPO) is expected to take place at the end of Q1 or in Q2 2018.

gategroup CEO Xavier Rossinyol: “As the global leader in airline catering and food & beverages retail on board, gategroup and its management team are excited about the prospect of becoming a public company again”

The HNA news follows hot on the heels of last week’s announcement that the Chinese group is putting “some or all” of its US$1.4 billion, 25% stake in Park Hotels & Resorts up for sale. Bloomberg described that divestment as “the latest in a slew of asset disposals that have emerged as the embattled Chinese conglomerate scrambles to repay its mounting debts”. The company also reduced its holding in Deutsche Bank last month.

HNA remains a sizable shareholder in the world’s leading travel retailer, Dufry, although last December it divested 5.57% of its previous 20.9% stake to hedge funds Elliott International and The Liverpool Limited Partnership (most of that stake was in turn sold on by Elliott earlier this year).

gategroup said that over the past two years it has focused its business activities on core competencies of airline catering and retail onboard, expanded its global footprint and increased both revenue and profit. “Proceeds from the IPO will provide the company with enhanced flexibility to, among other things, continue delivering under the Gateway 2020 strategy and exploit future growth opportunities,” the group said.

The envisaged post-IPO free float, assuming the full exercise of the over-allotment option (greenshoe), is about 65% of gategroup’s share capital.

Towering debt: HNA Group’s headquarters on Hainan Island, China. After an extraordinary multi-national acquisition spree in recent years, the debt-laden conglomerate is now having to unwind several of its deals [Picture: Martin Moodie]

HNA Group CEO Adam Tan said, “We are proud of the significant progress gategroup has made over the past two-and-a-half years. The company stands on a very solid foundation and is ready to continue and further accelerate its recent growth path. We believe the envisaged IPO will allow gategroup to bring new, innovative products and services to the market and to expand in new markets.

“As a strategic investor and anchor shareholder, HNA will continue to support gategroup with relevant industrial and market expertise, not only based on our experience in the airline industry but also given our global footprint.”

A new board will comprise nine directors, three appointed by HNA, one executive and five independent. It will be chaired by Adam Tan.

gategroup CEO Xavier Rossinyol* said: “As the global leader in airline catering and food & beverages retail on board, gategroup and its management team are excited about the prospect of becoming a public company again. The planned IPO underpins the successful and consistent execution of our Gateway 2020 strategy thus far and allows us to accelerate ongoing investments in our future growth.

“HNA has been a strong supporter and enabler of this transformation. Our new Board of Directors will provide their leading industry expertise and strong guidance to help us meet the continued high ambitions of the company.”

FREE FLOAT OF APPROXIMATELY 65%
The offering is planned to consist of primary and secondary shares and a greenshoe of up to 10% of the base size of the transaction. The primary offering is expected to result in proceeds of approximately CHF350 million (US$373 million).

The proceeds from the primary offering are expected to be used for the acquisition of the remaining shares of Servair from Air France-KLM, the funding of pension plans and other corporate purposes, gategroup said.

Overall, the envisaged IPO aims at a free float of around 65% of all shares (assuming full exercise of the over-allotment option). gategroup will not receive any proceeds from the sale of the secondary shares.

LEADING AIRLINE CATERER AND RETAILER

gategroup is the global leader in airline catering, retail onboard and hospitality products and services. The company employs approximately 43,000 people worldwide and serves over 700 million passengers annually from over 200 operating units in 60 countries/territories.

*Note: gategroup CEO Xavier Rossinyol will present an address on the future of travel-related catering at the Airport Food & Beverage (FAB) Conference, organised by The Moodie Davitt Report (Helsinki, 20-21 June).