Air Seychelles (HM, Mahé) has officially been removed from administration, which it entered in early October 2021, and the company’s board of directors is now back in charge, the country’s transport minister declared on November 14.

Antony Derjacques told a gathering of reporters that, as quoted by the Seychelles News Agency, “today is a very happy occasion as we announce that Air Seychelles is out of administration after 13 months.”

Of the financial difficulties it faced a year ago, arguably Air Seychelles’ biggest hurdle was its USD76 million debt dating from its time under the stewardship of Etihad Airways (EY, Abu Dhabi International), which was a 40% shareholder in the company.

The sum was owed to Etihad bondholders under the name EA Partners, who in August 2021 took the step of filing a winding-up petition against Air Seychelles in their efforts to seek repayment. The state-owned carrier had already said it could pay only about a quarter of the amount, the only alternative being insolvency and liquidation proceedings.

During the restructuring, administrators revealed in January that they had struck a deal in which its creditors and bondholders had agreed to accept a cut of 66.67% to their claims. The winding-up petition was withdrawn in May after Air Seychelles provided settlement funds of USD28,159,399.

Derjacques told the reporters that the amount that was eventually paid came partly from the carrier’s own coffers, while the Seychelles government had lent it USD13 million to help cover the cost, to be repaid over a period of six years.

“The rescue plan for Air Seychelles was recently presented to the court, where on November 7 that plan was accepted and a day later the board of directors signed a resolution that they will execute that plan,” he said.

The plan envisages, for example, a new company that will own all of the groundhandling assets, for which Air Seychelles will sign a management contract to access. This will ensure, according to the transport minister, that in the event of any future difficulties the impact on groundhandling will be minimal.

The Seychelles News Agency also reported this week, quoting Ministry of Finance projections, that Seychelles will likely have a debt-to-GDP ratio of 68% this year, down from 92% in Covid-ravaged 2020. However, in the third quarter of 2022, external debt rose by SCR307 million Seychellois rupees (USD23 million) compared to the previous quarter. This is attributed both to the ongoing disbursement of International Monetary Fund (IMF) budget support and a loan from the Burundi-based Trade Development Bank taken to repay the Etihad liabilities and release the security that had been placed on two of the airline’s five owned DHC-6-400s.

According to the ch-aviation fleets module, Air Seychelles currently operates a fleet of seven aircraft, the other two being a pair of dry-leased A320-200Ns.