Servisair braves new issues market

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The Independent Online
SERVISAIR, Europe's largest independent airport handling company, yesterday shrugged off weakness of the new issues market, pricing its forthcoming placing and intermediaries offer at a slight premium.

A small part of the pounds 5bn assets acquired by the Swedish government when one of its leading banks came close to collapse, Servisair is the first company in the portfolio to be floated in London.

The 135p issue price values the company at pounds 54.3m, in line with expectations of between pounds 50m and pounds 60m. The issue will raise pounds 9.5m of new money, and a quarter of the 24 million shares on offer are available to the public through intermediaries.

Jan Kvarnstrom, chief executive of Securum, the company set up to hold Nordbanken's assets, said: 'This is another significant step towards our goal of enhancing and realising the overall value of the international portfolio we inherited.'

Securum plans to keep 40 per cent of the shares as an indication of its confidence in Servisair's prospects.

After the collapse of Nordbanken, Securum became by default one of the largest property companies in Europe. Nordbanken had been one of several Swedish banks in the late 1980s making property loans in the UK just as the British boom peaked.

As well as hotels around Europe and a ski resort in Sweden, its assets include the Ark, an architecturally feted but empty office building at Hammersmith, west London.

Servisair, which provides passenger and baggage handling services to 200 airlines at 23 British and 36 foreign airports, has benefited from the rapid growth in air traffic. BAA expects passenger growth to continue at 4 per cent a year for 10 years.

For the year to December profits are forecast to be not less than pounds 4.2m compared with pounds 3.2m last year, although there will be a pounds 1.4m exceptional charge to cover the restructuring of a recent acquisition, Ogden Aviation.

Tony McCann, the former chief executive of Astra Holdings who chairs Servisair, said it was trying to break into the big Heathrow ground handling market, at present divided between eight airlines. It recently won a 10-year contract at Glasgow, Britain's fourth largest airport.

A promised dividend of 3.8p implies an initial yield of 3.5 per cent.