Temasek said to mull stakes in HNA's Gategroup, Swissport

[SINGAPORE] Temasek Holdings Pte is studying potential investments in Swissport Group and Gategroup Holding AG, both owned by HNA Group Co, as it considers deals with the indebted Chinese conglomerate, people with knowledge of the matter said.

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, the people said. It may reach agreements on some of the potential deals as soon as the third quarter depending on the pace of negotiations, one of the people said, asking not to be identified because the information is private. Swissport's bonds jumped by a record.

Swissport offers ground and cargo handling services at airports, while Gategroup is an airline caterer. SATS Ltd, 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 state investment firm is exploring spending at least a few hundred million US dollars on any deal, the person said. Any investments would be subject to commercial negotiations, and there's no certainty the deliberations will lead to any transaction, the people said.

Swissport's 265 million euros (S$429 million) of bonds due in December 2022 climbed by a record 3.4 cents on the euro to 108 cents at 1.10 pm in London, according to data compiled by Bloomberg.

HNA said Tuesday that it signed a preliminary agreement with Temasek to cooperate in areas including aviation, logistics and airport infrastructure. The announcement coincided with Singapore 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 assets spanning hotels to property, has been under pressure to reverse a multi-billion dollar buying spree since the Chinese government last year stated a crackdown on overseas dealmaking.

BLOOMBERG