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Air France-KLM .... stepping up cost cuts and slashing investments.

Air France-KLM eyes $435m from catering unit sale

FRANKFURT, March 7, 2015

Air France-KLM will launch a sale of its catering unit Servair soon, seen worth up to around €400 million ($435 million), and has mandated BNP Paribas to manage the deal, sources familiar with the matter told Reuters.

The Franco-Dutch carrier plans to keep a stake in the business, with first bids due before Easter and likely buyers being French buyout groups such as PAI and Ardian or France-friendly investors such as Advent, one source said.

Air France-KLM declined to comment. Advent, Ardian and PAI also declined to comment.

Two sources familiar with the matter estimated Servair had an enterprise value of €300 million to €400 million.

Servair's clients include 120 airlines, and it employs 10,000 people. Each day, the company produces more than 230,000 meal trays at 38 airports, providing 83 million meal trays and cleaning 39 million seats in 2013. Full-year turnover was €771 million ($845 million), according to its website.

Air France-KLM is stepping up cost cuts and slashing investments in an effort to overcome a stagnating economy in Europe.

Europe's second-largest traditional network carrier after Germany's Lufthansa has also eased its debt-reduction goals as a weak euro threatens to lessen the benefits of lower oil prices.

Last month, the carrier declined to give a 2015 profit forecast as it unveiled full-year earnings following three profit warnings in the previous 12 months.

Lufthansa and Air France-KLM have both been reported to be looking at sales of their food units in recent years.

Lufthansa's LSG Sky Chefs took over Finnair's catering business a year ago, and Lufthansa chief executive Carsten Spohr told The Financial Times in August he preferred retaining LSG Sky Chefs to a sale.-Reuters

Tags: Stake | Catering | Air France-KLM |

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