MARK PILLING LONDON

The receivers at the Swissair Group have sealed the disposal of two of its major subsidiaries, ground handler Swissport and in-flight catering company GateGourmet. They have also sold the Group's stakes in South African Airways (SAA) and Italian leisure carrier Volare.

The handling and catering operations are both being sold to specialist investment groups and feature management buy-out deals. Swissair's receivers have given Texas Pacific Group (TPG) of the USA a 60-day exclusivity period to conclude the purchase of GateGourmet, the world's second largest in-flight caterer, whose business was severely hit by the downturn in traffic since 11 September.

TPG, which has invested in Continental Airlines and America West, will aim to expand the catering business says George Alvord, president of GateGourmet's Americas division. "It is not at all about asset stripping, and will definitely be for growth. The fact that we are global brings value tothe marketplace; to start cutting it up doesn't bring the same value," he says.

Management participation in the deal, which will likely be in the order of 10-15%, was strongly encouraged by TPG. If the deal succeeds, the aim is for GateGourmet to continue its aggressive growth strategy - it has purchased several in-flight businesses over the past couple of years including Dobbs of the USA. It had annual revenues of $2.4 billion in 2000/1.

Swissport, the world's second largest handler with revenues of $600 million in 2000, has been bought for SFr580million ($340 million) by Candover, a UK investment group. "It is our intention to support Swissport in driving consolidation across the sector," says Candover managing director Marek Gumienny, who also sees opportunities to gain business from airlines wanting to out source their handling.

The 20%stake which the Swissair group acquired in SAA will now go back to the South African government for 382 million rand ($33 million). That is only a quarter of what Swissair originally paid for the shares. This deal follows the sale of its 49.9% shareholding in Italian carrier Volare to the firm's president, Gino Zoccai, for SFr70 million.

Source: Airline Business