Temasek eyeing investments in aviation-linked HNA assets

Temasek Holdings is studying potential investments in Swissport Group and Gategroup Holding, both owned by HNA Group, as it considers deals with the indebted Chinese conglomerate.

Temasek, which inked a partnership with the Chinese group this week, is exploring buying stakes in a number of HNA affiliates that are complementary to its portfolio companies, people with knowledge of the matter said.

It may reach agreements on some of the potential deals as soon as the third quarter, depending on the pace of negotiations.

Swissport offers ground and cargo handling services at airports, while Gategroup is an airline caterer. Sats, a Singapore-listed company whose biggest shareholder is Temasek, runs similar operations. Temasek is also studying a variety of other investments in HNA units, the people said.

The Singapore investment company is exploring spending at least a few hundred million US dollars on any deal. Any investments would be subject to commercial negotiations, and there is no certainty the deliberations will lead to any transaction, the people said.

Swissport's €265 million (S$429 million) in bonds - due in December 2022 - yesterday climbed by a record 3.4 cents on the euro to 108 cents in London.

HNA on Tuesday said it signed a preliminary agreement with Temasek to cooperate in areas, including aviation, logistics and airport infrastructure.

The announcement coincided with Prime Minister Lee Hsien Loong's visit to China. Later the same day, HNA postponed a planned share sale in Swissport Group, citing market conditions, about two weeks after shelving a similar plan for Gategroup.

Temasek declined to comment beyond Tuesday's statement. A representative for HNA also declined to comment.

HNA, which is disposing of assets spanning hotels to property, has been under pressure to reverse a multibillion-dollar buying spree since the Chinese government last year stated a crackdown on overseas dealmaking.

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A version of this article appeared in the print edition of The Straits Times on April 12, 2018, with the headline 'Temasek eyeing investments in aviation-linked HNA assets'. Print Edition | Subscribe