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Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
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Alpha Airports | LSE:AAP | London | Ordinary Share | GB0000281328 | ORD 10P |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
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0.00 | 0.00% | 109.00 | 0.00 | 01:00:00 |
Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
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0 | 0 | N/A | 0 |
RNS No 3548r ALPHA AIRPORTS GROUP PLC 13 July 1999 ALPHA Airports Group Plc ("ALPHA Airports") Proposed disposal of DynAir (the "Disposal") * Proposed disposal of ALPHA Airports' ground handling business, DynAir, to SAir Group for a total cash consideration of US$155.0 million (#99.5 million) * Proceeds will be used to reduce Group borrowings and allow greater financial resources to be directed to development opportunities in Airline Catering and Retail in the UK and Europe * The Disposal is subject to shareholder approval at an Extraordinary General Meeting which has been convened for Thursday, 29 July 1999 * A circular containing details of the Disposal and notice of the Extraordinary General Meeting is being sent to shareholders today Commenting on the transaction, Kevin Abbott, ALPHA Airports' Chief Executive, said: "We are pleased with the terms of the proposed sale of DynAir. This disposal will now enable the ALPHA Airports Group to focus its management and financial resources on the further development of its airline catering and retail businesses." 13 July 1999 Press enquiries: ALPHA Airports Group Plc Kevin Abbott, Chief Executive Today: 0171 457 2345 Stuart Siddall, Finance Director Thereafter: 0181 580 3200 Schroders (New York) Mark Francis 001 212 492 6000 Matt Lew Schroders (London) David Wormsley 0171 658 6000 Nick Reid Richard Butland Gavin Anderson & Company Marc Popiolek 0171 457 2345 Laura Hickman J. Henry Schroder & Co. Limited ("Schroders"), which is regulated by the Securities and Futures Authority Limited, is acting for ALPHA Airports and for no one else in relation to the Disposal and will not be responsible to anyone other than ALPHA Airports for providing the protections afforded to its customers or for providing advice in relation to the Disposal. ALPHA Airports Group Plc ("ALPHA Airports") Proposed disposal of DynAir (the "Disposal") 1. Introduction ALPHA Airports has today agreed to dispose of DynAir, its ground handling business, to the SAir Group for a total cash consideration of US$155.0 million (#99.5 million). SAir Group is the holding company of the Swiss based airline services group which owns Swissair and the Swissport ground handling operations. In view of its size, the Disposal is conditional, inter alia, upon the approval of ALPHA Airports' shareholders which is to be sought at an Extraordinary General Meeting to be held on Thursday, 29 July 1999. A circular containing details of the Disposal will be posted to shareholders today. 2. Background to and reasons for the Disposal Last year, the ALPHA Airports Board conducted a strategic review that examined the options for the development of the Group, including its ability to fund development opportunities effectively. The Board concluded that the Group and its constituent businesses would benefit from a more focused application of both management and financial resources, through a reduction in the number of core divisions. A significant element of the strategic rationale for ALPHA Airports' ownership of DynAir has been the opportunity to leverage DynAir's expertise and to expand the business into Europe, alongside ALPHA Airports' other businesses. Over recent years, the DynAir and Group management teams have examined a number of European growth opportunities for DynAir. In each case, the Board determined that either the investment would not deliver acceptable returns or that the Group did not have sufficient resources to invest in the opportunity. The Board believes that DynAir is likely to be of greater value to a larger group that can, through investment, leverage the business' considerable strengths. The Board believes that a sale of DynAir will enable the Group to focus its management and financial resources more effectively on the retained businesses. 3. Financial effects of the Disposal The consideration receivable from the Disposal of US$155.0 million (#99.5 million) will be used to reduce Group borrowings. In addition, ALPHA Airports' total available borrowing facilities will reduce from #114.1 million to #57.2 million upon completion of the Disposal. The Board expects the Disposal to dilute short-term earnings per share until some of the proceeds can be reinvested to generate superior returns to those simply available through repayment of outstanding debt and on cash deposits. The Board believes this short-term dilution is acceptable given the benefits of greater financial flexibility, improved focus and the growth opportunities available to the remaining businesses. For the ALPHA Airports Group, the profit on disposal after estimated disposal costs of #5.5 million and net of goodwill of #58.0 million previously written off is approximately #2.3 million, based upon pro forma net assets as at 31 January 1999. Estimated disposal costs of #5.5 million includes a provision of #1.5 million for estimated environmental liabilities. The profit on disposal after estimated disposal costs but before goodwill previously written off will be approximately #60.3 million. The Directors are continuing to evaluate any additional potential environmental liabilities that may arise from indemnities provided as part of the Disposal. 4. Information on DynAir DynAir is a leading provider of ground handling services in the USA. DynAir was acquired by the Group in 1995 for US$122 million and has since been expanded, predominantly in the USA, and now operates at 57 airports in the USA, Italy and Russia. Services provided fall into three broad categories: * General airport services, which includes management of reservations, overnight mail handling, ground support and equipment maintenance, baggage handling, aircraft cleaning and de-icing, passenger ticketing, transportation services, parking management, line maintenance, security and warehousing; * Fuelling, which includes aircraft re-fuelling, tank farm management and fuel distribution; and * Cargo handling, which includes the design and operation of air freight hubs, build-up and breakdown of cargo and mail, documentation preparation and customs clearance, and on and off loading of aircraft. In the year ended 31 January 1999, DynAir generated operating profit of #9.6 million (US$16.0 million) on sales of #121.1 million (US$201.0 million). The book value of the DynAir Group's assets was #33.7 million (US$55.3 million) as at 31 January 1999, which included #7.0 million (US$11.5 million) of cash. 5. Principal terms of the Disposal The Disposal comprises the sale of those companies which form ALPHA Airports Group's ground handling services operations comprising principally ALPHA US Holdings Inc and DynAir Services Inc and all its subsidiaries. The Disposal is subject to the approval of shareholders which will be sought at the Extraordinary General Meeting. Under the terms of the conditional agreement setting out the terms of the Disposal, the Group will receive total aggregate cash consideration of US$155.0 million (#99.5 million), payable in full on completion. The consideration includes US$7.5 million (#4.8 million) in respect of cash retained in DynAir. The consideration is subject to adjustment to the extent that, on completion, net assets sold are higher or lower than US$52.5 million (#33.7 million). 6. Current trading and future prospects Overall trading within the Group, including DynAir, since the start of the current financial year has been in line with expectations. On 30 June 1999, intra EU duty free and tax free allowances were abolished. Whilst ALPHA Airports was disappointed that the EU decided to proceed with the abolition, the Company is well placed to tackle the challenges of a changing travel retail industry. On 11 June 1999, the Board was pleased to announce the acquisition of the British Airways in-flight catering facility at Gatwick for #14.0 million. As part of the purchase agreement, British Airways and ALPHA Airports have entered into a new 10 year service agreement for the continued supply of in- flight catering and ancillary services at Gatwick and eight UK regional airports. In the ALPHA Airports Group's 1998/99 Annual Report it was indicated that a restructuring provision of up to #2 million may be required in respect of ALPHA Airport's Paris Orly kitchen on account of the loss of a major customer later this year. As a result and in the absence of replacement business, the full amount of #2 million will impact ALPHA Airports Group's full year results. The Board believes the prospects for Airline Catering are satisfactory. As stated in the Group's 1998/99 Annual Report, Retail profits are expected to be affected adversely by the abolition of intra EU duty free and tax free allowances and the reduction of profits of #1.5 million on the expiry of the Gatwick Management contract. Overall, the ongoing Group's prospects for the current financial year remain in line with the Board's expectations. 7. Board Changes On completion of the Disposal, Patrick Deasy, who is President of DynAir and a director of ALPHA Airports, will transfer with DynAir. Patrick Deasy will receive a bonus of US$250,000 to remain with the DynAir Group until 31 December 1999. On completion Patrick Deasy will therefore resign from the ALPHA Airports Board and cease to be employed by the Group. Due to his interest, by reason of his involvement in the Disposal, Patrick Deasy has abstained from the recommendation to shareholders to approve the Disposal. The Board wishes to record its thanks to Patrick Deasy for his service to ALPHA Airports. END DISSFSFLDUUUFLW
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