A Kyiv commercial court on May 29 dismissed Ukraine International Airlines’ claim over a majority stake in a joint-venture that once belonged to its erstwhile partner, global airport cargo handler Swissport International. The ruling further smoothes the path for the Swiss-based company to regain control over Swissport Ukraine, presently rebranded as Interavia, a local airport ground services provider that it lost to UIA in a corporate dispute that started in 2012.
The case was heard anew after the Supreme Economic Court on Oct.
2 nullified a lower court’s ruling that compelled Swissport to sell its 70.6
percent stake in the local joint-venture to UIA – Ukraine’s largest airlines
owned by billionaire and Dnipropetrovsk Governor Ihor Kolomoisky, according to
Swissport International Senior Vice President Mark Skinner. A panel of three
judges sent the case back to the lowest court to hear the ongoing corporate
dispute.
“As a result of the new consideration (by the) Kyiv Economic
Court in its decision completely dismissed UIA’s claim against Swissport
International Ltd. on forced sale of shares in Swissport Ukraine. Thus Swissport
recovered 70.6% of handling company, owned by UIA for more than a year,” reads
a statement by Lavrynovych & Partners which represented the cargo handler
together with lawyers from the Kyiv office of DLA Piper.
In a response to a Kyiv Post inquiry, UIA corporate press
secretary Evgeniya Satskaya acknowledged that “UIA was denied declaration of
ownership of 70.6 percent stake in the Interavia share capital and the right to
compel Swissport International to sell the given stake to UIA.”
She maintained that UIA still “remains the legal owner of 100
percent of the shares in Interavia” because the May 29 court decision has not entered
into force.
The decision becomes effective 10 days after the full text of
the decision is released – expected on June 4 or soon thereafter – or is suspended
should UIA challenge the ruling.
Lavrynovych & Partners counsel Anastasiya Borysenko told the
Kyiv Post she expects UIA to appeal the ruling.
Satskaya said a decision will be made to appeal once the full
text of the ruling is analyzed.
The corporate dispute stems from UIA’s allegation
that its minority rights were violated in Swissport Ukraine. Particularly, UIA
stated that Swissport had threatened to dilute its 30 percent stake in their
joint venture.
Swissport countered that it had
merely proposed that UIA gets a reduction in shares in place of the money the
Swiss-based company would invest on its behalf in order to sustain double-digit
growth in Ukraine. Swissport added that UIA refused to cover its share of the
proposed investment.
After taking full control
following a March 27 court ruling, UIA re-branded the local company as
Interavia and pumped nearly $1 million into its share capital to meet growing
demand for services at Ukrainian airports, it explained in a news release,
adding that Swissport had neglected to do so.
Skinner of Swissport called UIA’s
explanations “inconsistent.”
“First they say they are
protecting their minority rights, later they say we didn’t want to invest to
expand the company,” said Skinner.
After further legal setbacks,
Swissport went on the offensive to involve the Swiss and French embassies – it
is owned by a French private equity firm – and has written letters to European
Union officials and agencies, including European Commission President Jose
Manuel Barroso.
UIA denounced Swissport’s
out-of-courtroom actions calling it “inadmissible” that it involved
the “political resources of the European Union to resolve a commercial
dispute and to leveling the bias of the court of cassation…”
Swissport Ukraine was established
in 2007 when the Swiss-based company bought a 51 percent stake in Interavia Ltd
from UIA. Over time Swissport increased its share to 70.6 percent and rebranded
the cargo handler. It maintained the relationship was amicable until Aron Mayberg
acquired a 100 percent shareholding in UIA when it was privatized in 2011. Exiting
UIA’s shareholder structure were Austrian Airlines with more than 22 percent,
the European Bank for Reconstruction and Development with 10 percent, and the Ukrainian
government with a 61.5 percent stake, which was valued as much as $150 million,
for just $31 million, reported The Loadstar, a website devoted to logistics and
supply chain analysis.
When UIA took over Swissport
Ukraine last year, the Swiss-based company said that it had 800 employees, and
some 20 customers. Internationally, it reported achieving $2.39 billion in
revenues last year, an 11 percent increase over the previous year.
Kyiv Post editor Mark Rachkevych can be
reached at [email protected].
