Aviation services provider gategroup has reached a deal with investors RRJ Capital and Temasek to restructure its debts.

The Swiss company - which provides services including catering, onboard retail and food logistics – has been hard hit by the slowdown in air travel in the wake of the Covid-19 pandemic.

The deal provides 500 million Swiss francs (£451 million) in new funding from Singapore state fund Temasek and Asian investment firm RRJ.

This includes 25 million francs in equity and a 475 million franc subordinated, convertible loan.

A statement explained the transaction would provide the group with significant new liquidity to address short- and medium-term needs and will help establish a stable capital structure.

However, the deal is still subject to the execution of definitive documentation, customary conditions and regulatory and other approvals. 

“This transaction is a key milestone for the group.

“It will position gategroup well for a recovery in the aviation sector and also support the diversification of the group.

“The agreement signifies the commitment of our shareholders and lenders to the group, its management and employees,” said gategroup chief executive, Xavier Rossinyol.

He added: “The group will work together with its stakeholders to further improve our cost structure and prepare for the ramping-up of business by our customers.”

The parties added they continued to finalise a lock-up agreement and said detailed terms of the deal together with information on the process for maturity extension of the bonds would be released in due course.