Cerberus Is Said to Pursue HNA's $3 Billion Swissport Unit

(Bloomberg) -- Cerberus Capital Management is among parties holding talks to acquire a stake in Swissport Group as embattled Chinese conglomerate HNA Group Co. weighs options for the airport luggage handler, people with knowledge of the matter said.

HNA is working with advisers to explore possibilities for Swissport including the sale of a majority stake in the business, according to the people. Swissport could be valued at about $3 billion in a deal, the people said, asking not to be identified because the information is private.

Swissport has also attracted interest from other suitors, the people said. Singapore state investment company Temasek Holdings Pte has been studying a potential investment in Swissport as it considers deals with HNA that are complementary to its portfolio, Bloomberg News reported in April.

Representatives for HNA and Cerberus declined to comment.

An investment in Swissport would help Cerberus expand its handling services business globally. In June, Cerberus agreed to buy Worldwide Flight Services from Platinum Equity in a deal valued at about 1.2 billion euros ($1.4 billion). WFS provides ground handling and technical services at about 200 locations across more than 20 countries, according to its website.

Swissport’s Performance

Swissport provides services such as aircraft loading, baggage sorting, check-in services, port authority liaisons and plane maintenance. HNA agreed to buy the company in 2015 from buyout firm PAI Partners for 2.73 billion Swiss francs ($2.7 billion).

The company reported 2017 revenue that rose to 2.8 billion euros from 2.7 billion euros, and operating earnings before interest, tax, depreciation and amortization of 220 million euros. In March, it completed the acquisition of Australia’s Aerocare, which it said will help it expand in the Asia-Pacific region.

HNA is selling off assets after racking up one of China’s biggest corporate debt loads in a global acquisition 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.

To shore up its balance sheet, HNA has sold out of Hilton Worldwide Holdings Inc. and the Radisson hotel chains this year and started disposing its stake in NH Hotel Group SA. The Chinese company also agreed to sell a stake in aircraft leasing firm Avolon Holdings Ltd. to Orix Corp. for $2.21 billion earlier this month.

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