Go-Ahead Group Plc. (GOG.L) announced that it has exchanged contracts to sell the majority of its aviation ground handling and cargo operations. Dnata will acquire 100% of the issued share capital of Plane Handling Ltd, consisting of cargo operations at Heathrow and Manchester and ground handling operations at Heathrow Terminal 3. In addition, it will acquire the passenger and ground handling assets and employees of aviance at Heathrow Terminals 3 and 4. The total cash consideration is £15 million, assuming no net debt and normal levels of working capital and is payable by Dnata on completion.
Under this asset sale agreement by aviance, Servisair UK Limited will acquire the ground handling operations at 11 UK airports, the aviance passenger lounge operation at Gatwick and the aviance cargo operations at Stansted for a nominal upfront cash consideration.
Completion for both agreements is expected at the end of January 2010, subject to contract.
Go-Ahead will retain responsibility for a small number of activities at Heathrow, primarily to support remaining ground handling contracts at Terminal 1 into the first half of 2011. The expected losses from these activities will be provided for as at 31 December 2009 as part of the transaction.
Go-Ahead will also continue to operate its Meteor parking business which is not affected by the above transactions.
As a result of the above, the operating profit for this division, before amortisation and exceptional items, for this financial year to June 2010 is expected to be close to breakeven, compared to a loss of £4.5 million last year.
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