Air Seychelles sets final terms for Etihad’s debt

NAIROBI, May 6 (Reuters) – State-owned Air Seychelles will pay no more than $ 20 million to bondholders worth $ 72 million, a government official told Reuters, even though creditors have threatened to liquidate the African airline if they are not paid. in full.

The deadlock is the latest twist in broader efforts by creditors to recover $ 1.2 billion owed by Etihad Airways of Abu Dhabi and the airlines it partially owned when the debt was issued in 2015 and 2016, like Air Seychelles.

At the time, Etihad owned 40% of Air Seychelles and it was in a consortium with the airline Gulf and other carriers who borrowed the money through the special purpose vehicle EA Partners.

When the COVID-19 pandemic struck last year, Air Seychelles said it was struggling to honor its share of the $ 71.5 million debt and was engaged in restructuring talks with a creditors steering committee since July.

A senior Indian Ocean archipelago government official told Reuters he would not be able to offer bondholders more than $ 20 million to settle the debt.

“The $ 20 million that has been offered represents the upper limit in terms of funding that Air Seychelles and / or the Seychelles government can obtain approval and successfully raise in the international market for the settlement of the obligation, ”Patrick Payet, Secretary of State for Finance, said.

An EA Partners creditors committee last month asked Air Seychelles to repay its debt, according to a regulatory filing from EA Partners.

“If Air Seychelles does not comply (…) the creditor will ask the Supreme Court of Seychelles to order the liquidation of Air Seychelles,” the case said last month.

The committee told Reuters this week it had rejected the $ 20 million offer but had yet to file a liquidation petition to give the government a “grace period” to finalize a separate settlement with Etihad.

Etihad sold its stake in Air Seychelles to the government for a dollar last month and agreed to give it a 79% discount on the money it still owed the Gulf carrier, which is also around 72 million. dollars, the Seychelles news agency reported.

Creditors said it was unacceptable for Seychelles to offer financial investors a discount similar to the one they received from Etihad, as the airline was a strategic shareholder.

Payet said if creditors do not accept the $ 20 million offer, the airline should consider other options, including insolvency and liquidation proceedings.

“It is the right of bondholders to pursue legal options,” he said. “However, all of our forecasts show that in such an eventuality, bondholders will get back significantly less than the $ 20 million currently on offer and it will take much longer to receive anything.” (Reporting by Omar Mohammed in Nairobi and Davide Barbuscia in Dubai; editing by David Clarke)

Source link

Comments are closed.