The Seychellois government has given its assurances that it will support flag carrier Air Seychelles (HM, Mahé) which is facing a liquidation hearing on September 6 over USD71.5 million of debt.
Designated Minister and Minister of Fisheries, Jean-François Ferrari, is to head a committee to hold talks with creditors, officials told Seychelles News Agency following a high-level meeting on the matter on August 27 between President Wavel Ramkalawa, Transport Minister Anthony Derjacques, Finance Minister Naadir Hassan, and the Air Seychelles board.
They have been galvanised by a winding-up petition filed against the airline in the Seychelles Supreme Court on August 19 by APEX Corporate Trustees (UK) on behalf of the bondholders at EA Partners II, a Netherlands-based special purpose vehicle (SPV) belonging to the Etihad Aviation Group, the former 40% shareholder of the airline. The creditors said they had made it clear since July 2020 that they were willing to reach a "fair and equitable resolution to the airline's debt challenges", but that there had been unsubstantive engagement, nor any sense of urgency, on the airline's situation from its board or the government, its sole shareholder. A statutory demand regarding debts owed to the EA Partners bondholders was served on the airline on April 1, 2021.
The bondholders' committee noted the President's recent public commitment to save Air Seychelles, saying it was prepared to work with the government provided the rights of creditors and their position in the capital structure was respected, and the government committed to a fair and equitable settlement with the EA Partners bondholders. The legal proceedings precipitated after the bondholders had demanded the USD71.5 million claim be settled in full only for the government to counter-offer with no more than USD20 million.
Following the preparatory government meeting, Derjacques said: "We hope that we can bring a positive result and that we can move forward with the airline'. He stressed the importance of Air Seychelles continuing as a commercially viable business in order to safeguard jobs. He underlined the airline would continue to operate despite the court challenge.
Ramkalawan said the meeting was held to ensure that local stakeholders were on the same page before the company appeared before the Indian Ocean archipelago’s Chief Justice next week. In the event the court rules in favour of the bondholders and a liquidation order is given, Air Seychelles' fleet would be at risk. However, according to the ch-aviation fleets module, while its five DHC-6-400s are all owned, its two A320-200Ns are leased from Air Lease Corporation and CDB Aviation.
Board chairwoman Veronique Laporte thanked management and staff “for their understanding and commitment during these uncertain times." "We have seen their determination and hard work since the new board took over and would like to continue, without being side-tracked by anything, as we continue to work towards our restructuring plans to make Air Seychelles sustainable," she added.
