Autogrill Sells Alpha Catering Unit To Dnata For GBP100 Million

Italy's Autogrill SpA (AGL.MI) has agreed to sell the airline catering division of its U.K. subsidiary to Dnata of Dubai for GBP100 million in cash.

Autogrill, one of the world's biggest operators of highway and airport restaurants and duty free shops, said Friday it will use the proceeds from the sale of Alpha Flight Group Ltd to pay off some EUR162 million of debt.

It adjusted downward its targets for the year to take into account the loss of contributions from the division, which supplies in-flight meals and retail goods to airlines such as British Airways Plc (BAY.LN).

Autogrill said it expected consolidated revenue to total EUR5.6 billion and earnings before interest, tax, depreciation and amortization, or Ebitda, to reach EUR590 million.

Its previous targets were revenue of up to EUR6 billion and Ebitda of EUR635 million.

In 2009, revenue totalled EUR5.72 billion and Ebitda EUR606.3 million.

The sale, which is expected to close by Dec. 31, will also see Dnata pay back GBP60 million that the division owed to Autogrill. It will also take on other debt held by the division.

The division was part of Alpha Airports Group, which Autogrill bought in 2007 for GBP193.6 million to enter the U.K. market.

Autogrill is keeping the retail business because it fits better with its core business.

Based in Dubai, unlisted Dnata is an airport services and travel operator. It said in a joint statement with Autogrill that the acquisition will help it expand its international network.

Autogrill, 59.3% owned by Schema34 Srl, a holding company of the Benetton family.

-By Gilles Castonguay, Dow Jones Newswires; +39 02 5821 9908; gilles.castonguay@dowjones.com

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