Air Austral (UU, St. Denis de la Réunion) has completed its accession to Air Madagascar's share capital following the signing of an equity purchase agreement on Thursday, November 30.
Under the terms of the deal, Air Austral will acquire a 49.41% stake in the Malagasy carrier for USD40 million with the Malagasy state retaining a majority 50.59% shareholding.
According to a government release, Air Austral's contribution is broken into three tranches; the first entails USD10 million needed to acquire a 39.04% stake in Air Madagascar and which has now been paid in. The second tranche of USD5 million will take its equity stake to the 49.41% agreed to while the remaining USD25 million will be used to recapitalize Air Madagascar's operations.
For its part, the Malagasy state covered the airline's MGA303 billion Malagasy Ariary (USD94.4 million) worth of legacy debts. As such, following this disbursement, Antananarivo will no longer support the airline from its 2018 budget onwards.
As majority shareholder, the Malagasy state has appointed Herivelo Andriamanga as Chairman of the Board along with three of the seven board members namely Thierry Rakotoarison, Eric Koller and General Didier Gérard Paza.
For its part, Air Austral has nominated Didier Robert (President of shareholder Sematra), Marie Joseph Male (President And CEO of Air Austral), and Dominique Dufour, (Secretary General of Air Austral) as its representatives.
Air Austral aims to revamp Air Madagascar's fortunes via a two-phased business plan. The first phase entails a three-year turnaround period wherein the Malagasy airline will be put back on its feet while the second phase is will focus on long-term sustainable growth. Under the plan, Air Madagascar will reach a fleet of fourteen aircraft in 2020, growing to seventeen in 2023, while establishing a separate carrier focussing on domestic short-haul services.
