Gate Gourmet Acquires Majority Interest in Skygourmet

PR Newswire | 11 Nov, 2010

ZURICH: Gate Gourmet, a member of gategroup, today announced a joint venture agreement with India Hospitality Corp. (IHC) to acquire a majority interest in Skygourmet, the leading airline caterer in India with a presence in seven major cities. For gategroup, this transaction is a major move into the Asian market and a strategic breakthrough into the world's second-fastest growing economy where airline traffic recently has been increasing at an average of about 20 percent.

The transaction closed today and is not subject to any further regulatory or shareholder approvals. gategroup has acquired a 74 percent interest in Skygourmet and the consideration is a combination of cash and assumption of debt. IHC, the parent company of Skygourmet, will retain a 26 percent interest. Further details remain confidential.

"India's vibrant economy and its surging airline industry offer an excellent opportunity," said gategroup CEO Guy Dubois. "The Skygourmet acquisition fits perfectly with our growth strategy and with our objective to add to shareholder value by increasing gategroup's presence in emerging markets. We're confident this addition will grow our top line and improve profit margins," he said.

"India is a greenfield expansion opportunity for gategroup, and we are pleased that IHC retains an interest in Skygourmet to help us adapt to this vibrant market," Dubois added.

Ravi Deol, IHC Managing Director and Chief Executive Officer, said: "It is a win-win situation for both companies. This partnership with a category leader will combine Skygourmet's leadership and knowledge of the Indian market with Gate Gourmet's global best practices. We are confident the combination will create significant value for the shareholders and provide superior service to customers. IHC remains committed to the Indian market and will continue its focus on developing consumer opportunities."

Skygourmet has a production capacity of more than 110,000 meals per day and is the only one with catering facilities at all six of India's major airports. It operates in Mumbai, Delhi, Bangalore, Chennai and Hyderabad and is in the process of constructing a new unit in Kolkata. In Pune, Skygourmet has a franchise arrangement.

Skygourmet has strong relations with the three major domestic airlines in India: Jet Airways and its subsidiary, JetLite; Kingfisher Airlines; and NACIL (Air India/Indian Airlines) serving them at most of their hubs and other domestic locations. Gate Gourmet already has a unit in the Indian resort town of Goa, which it acquired in 2007.

While Skygourmet primarily serves the domestic Indian market, gategroup has significant upside potential to leverage its global network capability and grow business with international carriers flying into India. In addition, gategroup's expertise in onboard retailing will enhance Skygourmet's existing buy-on-board offering to domestic carriers.

"We have long identified Asia as an area of enormous potential. Establishing a major foothold in India, coupled with our recent moves to expand at Tokyo's Narita and Haneda airports, demonstrate that gategroup is executing on its growth strategy in that important region," Dubois said.

The joint venture will be overseen through a newly created Advisory Board, which will include Guy Dubois, CEO; Mike Pooley, Group Vice President and President Asia Pacific; and IHC's Promoter Directors Ravi Deol and Sandeep Vyas.

Skygourmet was established in 2002. It employs approximately 2,600 people. Its flight kitchens are five years old or less and have capacity for growth. "The business is well-run and cost-competitive with a strong market position. We welcome Skygourmet and its employees to the gategroup corporate family," Dubois said.

About gategroup:

gategroup is the leading independent global provider of onboard services to companies that serve people on the move. gategroup comprises 11 brands: deSter, eGate Solutions, Elan, Gate Aviation, Gate Gourmet, Gate Safe, Harmony, Performa, potmstudios, Pourshins and Supplair.

The Group's world-class capabilities are focused in catering and hospitality; provisioning and logistics; and onboard solutions. Its customers include top airlines and railroads around the world that rely on gategroup's expertise and solutions tailored to their guests, service offerings and geographic regions. Shares of Zurich-based gategroup are traded on the SIX Swiss Exchange under the symbol GATE. Please visit http://www.gategroup.com.

About India Hospitality Corp.

India Hospitality Corp. is a diversified pan-Indian hospitality and leisure company. The Company is present in airline catering, hotel and restaurant segments, through its India-based subsidiaries WAH Restaurants Private Limited (formerly Red Planet Restaurants Private Limited and Mars Restaurants Private Limited) and SkyGourmet Catering Private Limited ("SkyGourmet"). Its stock trades on the London Stock Exchange's Alternative Investment Market (AIM) under the symbol "IHC.". Please visit http://www.indiahospitalitycorp.com.

IMPORTANT NOTICE

This publication may contain specific forward-looking statements, e.g., statements pertaining to the growth of the Indian market and airline industry, our ability to increase shareholder value, our presence in emerging markets, our growth of revenue and profit margins, our growth of business with international carries that fly to India, our ability to enhance buy-on-board offerings and our ability to demonstrate growth in Asia or other statements including terms like "believe", "assume", "expect" or similar expressions. Such forward-looking statements are subject to known and unknown risks, uncertainties and other factors which may result in a substantial divergence between the actual results, financial situation, development or performance of the company and those explicitly or implicitly presumed in these statements. Against the background of these uncertainties readers should not rely on forward-looking statements. The company assumes no responsibility to update or revise any of these forward-looking statements or to adapt them whether to reflect new information, future events, developments or circumstances or otherwise.

INVITATION TO MEDIA

gategroup CEO Guy Dubois and CFO Thomas Bucher invite media representatives to participate in a telephone conference call regarding latest developments.

The call will be held at 10:00 CET on Thursday, Nov. 11, 2010.

To participate, please call the dial-in number approximately 15 minutes before the start time. Once dialed in, please follow the instructions given over the phone.

    
    Direct dial-in numbers:
    +41-(0)-91-610-56-00 (Europe)
    +44-(0)-203-059-58-62 (UK)
    +1-866-291-4166 (USA - Toll-Free)
    +49-(0)-69-2-22-22-05-93 (Germany)

INVITATION TO ANALYSTS AND INVESTORS

gategroup CEO Guy Dubois and CFO Thomas Bucher invite analysts and investors to participate in a telephone conference call regarding latest developments.

The presentation can be accessed via webcast and dial-in teleconference at 15:00 CET on Thursday, Nov. 11, 2010.

To listen to the live presentation via teleconference, call the dial-in number approximately 15 minutes before the start time. Once dialed in, please follow the instructions given over the phone.

    
    Direct dial-in numbers:
    +41-(0)-91-610-56-00 (Europe)
    +44-(0)-203-059-58-62 (UK)
    +1-866-291-4166 (USA - Toll-Free)
    +49-(0)-69-2-22-22-05-93 (Germany)

Please note that media will not be able to ask questions during the Q&A session for analysts and investors.

To link to the live webcast of the presentation, please go to the "Investor Pack" tab under the "Investor Relations" section of the gategroup website, http://www.gategroup.com.