Geneva-based airport and airlines service company Swissport International on Sept. 23 closed one of two chapters to restore ownership rights in a local cargo handler worth an estimated $25 million that it lost to its erstwhile partner Ukraine International Airlines.
Ukraine’s highest
commercial court nullified a general shareholders’ meeting held by Ukraine
International Airlines that took place in April 2013. That meeting took place
after Swissport had lost its 70.6 percent stake in the local joint venture with
the nation’s flagship airliner in an earlier court ruling. Having subsequently rebranded
the cargo handler from Swissport Ukraine to Interavia, the UIA gathering
of shareholders voted to increase the company’s share capital by $1 million, significantly
diluting whatever share Swissport could claim in the entity.
Billionaire and
Dnipropetrovsk governor Ihor Kolomoisky owns UIA, Swissport International
Senior Vice President Mark Skinner has told the Kyiv Post based on a
conversation he had with him. UIA has not addressed the Kyiv Post’s inquiries
regarding Kolomoisky’s alleged ownership of the airline. However, the airline has denied knowledge of Kolomoisky’s alleged ownership in previous public statements.
Lavrynovych &
Partners associate Anastasiia Borysenko who represented Swissport told the Kyiv
Post on Sept. 23 that the next step is to have the state company registry cancel
all decisions stemming from subsequent shareholders’ meetings.
The main case in the
corporate dispute between Swissport and UIA is in the court of appeals after the
highest commercial court on Oct. 2 sent the matter back to the lowest court to
be heard anew. It pertains to the compulsory transfer of Swissport’s 70 percent
stake in the local cargo handler to UIA that a Kyiv court allowed on March 27,
2013.
UIA corporate press
secretary Evgeniya Satskaya said the airlines “does not comment on lawsuits
prior the cases’ termination.” She added that “the court judgment in question
(of Sept. 23) is an interim stage of the economic dispute between UIA and
Swissport International. We uphold the right to possess and control the
Interavia handling operator. The contested case hearing will be continued.”
The main case is
scheduled to be heard on Sept. 25.
History of quarrel
The row between Swissport
and UIA dates to March 6, 2012. UIA alleges on that day that Swissport had voted
to dilute UIA’s minority stake in their joint venture during a shareholders’
meeting. Meanwhile, the global airport service company countered that it had
merely proposed the share dilution in exchange for pumping additional cash into
their business to sustain double-digit growth only after the airlines had
refused to contribute its respective share of the money.
Thus, UIA accused
Swissport of violating its minority shareholder rights and initiated
litigation. It eventually won the case in late 2012. This included the rights
to buy Swissport’s stake for $433,000.
In previous
communication with the Kyiv Post, UIA president Yuri Miroshnikov argued that Swissport had acquired a portion of its 70 percent stake “at
a symbolic price of $12,000 per 1 percent” in 2008.
In December 2012 after the initial court rulings,
Ukraine’s anti-trust body allowed UIA to buy the stake in the share capital of
Swissport Ukraine.
The Court of Appeal on March 27, 2013 upheld lower
court rulings in favor of UIA after which Swissport accused judges of accepting
bribes and its former business partner of orchestrating a “successful hostile raider
attack.”
When Swissport Ukraine was taken over, according
to company Senior Vice President Mark Skinner, the company was handling 50
flights a day for Kyiv’s Boryspil International Airport and had operations in
the capital’s Zhyliany Airport and Kharkiv Airport. By the summer of 2013, the
company had planned to hire an additional 200 people, to reach 1,000 employees
in Ukraine.
Swissport International entered the country’s airport
service market in 2006 when it bought a 51 percent stake in Interavia from UIA
when the airline was owned by the state. It promptly rebranded the company
Swissport Ukraine and bought an additional 19.6 percent in 2008 by exercising a
call option that UIA had declined from a company called ABH.
Skinner of Swissport told the Kyiv Post in previous
interviews that the relationship with UIA was amicable until 2011 when Israeli
citizen Aron Mayberg became the airline’s main shareholder and president.
Little is known about Mayberg, but he was the
founder of AeroSvit in the 1990s, a Ukrainian airline that filed for
bankruptcy. He was Aerosvit’s director general until December 2008.
When Mayberg took over Ukraine
International Airlines, the airline terminated its handling contract with
Swissport Ukraine, in which it had a 30 percent stake. The airline instead
chose Aerohandling, an airport handler once owned by Mayberg, in a tender for
which Swissport had also bid.
Regarding the service contract,
Skinner said Swissport gave the airline a 10 percent discount from the first
day it went into force and a further price reduction once the airline’s
passenger volumes increased: “the (service) contract was never forced upon UIA.
It was a bilateral agreement UIA was very happy to enter into.”
UIA had a banner year in 2013, growing
passenger traffic by 62 percent to 4.6 million, according to aviation analyst
CAPA. Last year it operated a fleet of about 40 aircraft across a network
of over 50 destinations. However, by year end, UIA plans cut its fleet by 25
percent, according to CAPA citing Miroshnikov.
Kyiv Post
editor Mark Rachkevych can be reached at [email protected].
