You're reading: Higher economic court postpones hearing of Swissport’s counterclaim in dispute with UIA

The Higher Economic Court of Ukraine on August 30, 2012 again postponed the hearing of a counterclaim by Swissport International Ltd. against a court ruling, under which from April 27, 2013 the company lost the ownership right to Swissport Ukraine LLC, control over which was transferred to Ukraine International Airlines (UIA), the press service of Swissport has reported.

“In the meantime UIA (Ukrainian International Airlines) unilaterally
took the decision to increase the share capital in Interavia with the
obvious goal of diluting [the share capital of] Swissport. By doing so,
UIA did now the same thing it sued Swissport for, when UIA falsely
alleged Swissport of a dilution attempt. The Ukrainian Government and
Anti-Raider-Commission are tardy in coming with their promised support
for foreign investors and companies that lost their business through
hostile takeovers,” reads the report of the Swiss company.

Swissport said it was very concerned about the “obvious delay
tactics” of the Higher Economic Court in the Ukraine. The court appeal
hearings in the third instance keep taking place for not longer than
five minutes before they are postponed again, the company said.

“Delays of this kind were already typical for the court hearings of
the first two instances. And it is also not unusual to hear about the
outcome of the court appeal hearing before it happens, just as for the
next hearing scheduled for September 18. Well-informed sources have told
Swissport that the court ruling will be against Swissport,” reads the
report.

Swissport said that the judicial system in Ukraine still seems to
allow activities that create circumstances difficult to reverse.

“These circumstances are typical for shareholders that intend to get
as much profit out of a company as possible before selling it partially
or completely without investing into the company, its people or
equipment,” reads the report.

Swissport said that the promised strong support by the Ukrainian
Government and the Anti-Raider-Commission of the Ukraine was long in
coming.

“Meetings of this Anti-Raider-Commission with Swissport
representatives and the Swiss and French ambassadors scheduled for the
beginning and mid of July have not yet taken place,” the company said.

As reported, on October 26, 2012, the Ukrainian court ruled that UIA
is to buy a 70.4 percent stake in Swissport Ukraine for just $400,000, while
the real value of the company is $25-30 million. The court ruling took
effect on April 27, 2013.

However, UIA insists that all rulings are legal and the purchase was
approved by the court on the basis of an appraisal endorsed by Swissprot
International and under conditions earlier discussed by the sides. The
forced purchase mechanism was agreed by the sides, and each of the sides
could apply it under certain conditions.

UIA noted that Swissprot International entered the business in 2006,
after acquiring a stake in its handling agent, when UIA was under state
control. After the transaction, UIA lost almost all the rights to the
company’s management, although it held almost 30% of shares in the
company. UIA also received a three-year contract on servicing by
Swissport International without the right to cancel it. After the
privatization of UIA, the airline tried to agree on civilized rules of
company management, although all talks got bogged down.

Swissprot
International summoned a meeting of shareholders for March 6, 2012,
where the company supported the dilution of the UIA’s stake and approved
the appraisal of the stakes in Swissprot Ukraine for their purchase.

Swissport said it very much appreciates the support and active
involvement of the Ukrainian government, the First Vice Prime Minister
of the Ukraine, Serhiy Arbuzov, who was recently nominated as the new
Head of the Ukrainian Anti-Raiding Committee, as well as the Swiss and
French Embassies in the Ukraine.

Swissport International Ltd. provides ground services for around 118
million passengers and 3.5 million tonnes of cargo a year on behalf of
some 650 client-companies in the aviation sector. With a workforce of
around 40,000 personnel, Swissport is active at 180 stations in 37
countries on five continents, and generates annual consolidated
operating revenue of CHF 1.9 billion.