Gatwick Airport Asks for Relief on $4.5 Billion Debt
(Bloomberg) -- London’s Gatwick airport asked creditors to change the terms on its 3.4 billion-pound ($4.5 billion) debt pile to allow the transport hub to recover from a slump in air travel.
The U.K.’s second-largest airport wants investors in its debt, including those holding 2.8 billion pounds of its bonds, to waive covenants and change certain conditions in the financing documents. Gatwick forecasts passenger traffic will drop as much as 70% this year compared with 2019 levels, the company said in a statement on Friday.
Holders of around 47% of Gatwick’s debt have indicated that they intend to vote in favor of the proposals by a deadline on Sept. 18, according to the statement.
The airport, majority-owned by French builder Vinci SA, said on Wednesday that it plans to cut nearly a quarter of its remaining staff after major customers reduced their presence there. Virgin Atlantic Airways Ltd. shut a Gatwick base, while British Airways and Norwegian Air Shuttle ASA put flights on hold.
“Like any other international airport, the negative impact of Covid-19 on our passenger numbers and air traffic at the start of the year was dramatic and, although there are small signs of recovery, it is a trend we expect to continue to see,” Gatwick’s Chief Executive Officer Stewart Wingate said in a separate statement on Friday.
The airport is also asking creditors to allow the issuance of as much as 300 million pounds of commercial paper to the Bank of England. It currently has “no plans” to tap the program but said it’s “prudent” to ensure it has access to it, if needed.
Heathrow, the U.K.’s largest airport, received backing from creditors last month to change covenants as it risked breaching them in the coming years due to the disruption caused by the Covid-19 pandemic.
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